5/21/26 The Smart Money Closing Call - FAKEDOWN?

Hinzugefügt: 2026-05-22

[00:00:00]Welcome to the smart money closing call.

[00:00:02]My name is Jacob Gabbard from Invest with Jacob, but we do this every Monday through Thursday at 3:55. I do apologize. I was a few minutes late today. I got a phone call right before we went live that I had to take. It was one I've been waiting on for a while and of course they called right before the live. So, uh I do apologize, but we're here. Um reversal day. They they tried to take it down. Uh it was weak all day and ultimately the bulls took it back up. On my midday call, I did warn my group that uh the structure to the downside did not look great for a C-wave down, which is what you'd be expecting when we get into this. I'll show you what I mean. Um, but overall, I was not real confident that the bears were going to win the day uh in the midday call, just given the overall structure of the day. Um, so we did see, you know, Nvidia had earnings yesterday. They were down almost 2% today. I I said that I had a hunch they'd be down, but 2% on an earnings call really ain't that big a deal. Um, it's just a down day. It's not like they got eviscerated or anything like that, but uh it does point to the fact that you see an earnings that was absolutely pristine. I mean, there's nothing you could say bad about Nvidia's earnings and they're down almost 2% on the day because that's how the markets work. It has nothing to do with what the earnings say. It has to do with what the structure is. My hunch was down based on the structure and that's what we saw.

[00:01:13]So, that's where we're at right now.

[00:01:15]We'll dig into these markets. Uh if you have a um stock you want to see, it looks like we already have two up in the chat. So, if you guys uh have them, be ready with them because they're coming up fast. First two always get done. And uh we do the ES futures and the NASDAQ futures as well. It's the last day of the week. It's a holiday weekend. I warned also in my room on the midday call. Be very very careful trying to short this market right now because the markets tend to float into holiday weekends. A lot of the traders take tomorrow off and a lot of the the uh guys who move mega shares aren't trading tomorrow. So you have algorithms running the market and they tend to just drift higher overall. So um occasionally we get a shocker and they sell off on those kind of days, but given the overall week and today's close, I would suspect tomorrow will be um bull, at least somewhat bullish, if not very bullish, just depending on what they decide to do. So let's uh bring this down to one screen. This screen on the right is the ES futures on the fiveminute chart just so you can kind of see the close was um they brought it down here and then and uh around noon and then oh this is still on Pacific Standard Time, huh? Uh about 3:00 and then bought it back up into the close. Um so we'll shift this back into the bigger picture chart here. Overall, we're looking for a bigger move down.

[00:02:27]And we thought that, and we still do think, by the way, that this can be an A B C down for A and then a B wave and then C like that for a wave four, which brings us into the 382 retrace right here, this green line at about 7150 or so, which also happens to be this consolidation zone where they went sideways for a while and built support.

[00:02:44]So, very, very common to see them once they break out from that zone come back and back test it. Um, which would also be a perfect 382 retracement for a wave four. So very very normal to see a pull back into 7150 and then higher from there. Um just depending on how they want to play this out in these extreme bull markets like this. Sometimes you don't get a very deep wave four.

[00:03:07]However, usually you get at least the 236 which is right around 7,300. Uh you have the 21 right above that at about 7320. So I would think they would come down and test this at uh some point here uh in the near future. Again, looking for this to be like an A, B, C for A and then a B and a C like that so that we can get that wave four down. That's the primary path and what we've been expecting and uh oops, didn't mean to delete that. And uh that's what we'd be looking for overall. Now again, tomorrow is a holiday Friday, meaning Monday is a holiday. Uh the market is closed on Monday. It's Memorial Day. Very, very often the market drifts higher. And if they get back above 7496 or we'll call it 7500 just for round number sake, then it's going to be likely we're headed straight back up into uh 7550 plus again. Uh looking probably for 7600 after that. So 7500 is going to be the key level. It's the 764 retrace. If they get past that tomorrow, then uh it does give the bulls the advantage moving forward. Still haven't had a great setup uh to the downside. Right now you're just kind of building a very weak awave.

[00:04:07]There's been no strength in this at all.

[00:04:09]um we'd be looking for something like this to short or uh potentially even get long just depending on the setup. The setup is what matters. The idea is simply an idea. Um I always explain every day that just because we have an idea of what we want the market to do doesn't mean we trade that. I'm not short right now. I have no inkling of being short right now. I'm waiting for a setup to get short or potentially get long just depending on which way looks better uh at the time. So right now we are flat at least on swing and day trades and um waiting for the next setup. We haven't had a setup since way down here, which we took long, killed that long twice on the way up two different times. Uh, and then we've been sitting waiting for the next setup. So, u, that's where we're at right now.

[00:04:48]Secondary path, you get this ABC down and the bounce fails and then they come down into this uh, 69 to 6,800 zone.

[00:04:55]Right here is the most traded level at about 6850. So, it would not be uncommon to see them come down into that level and then back higher. If that happens, I would target uh, 8,000ish on the S&P.

[00:05:05]And if they get close to 8,000, they're going to get 8,000. I think they're going to get 30,000 on the ENQ. And then the bearish path, if the bears are going to try to win the market, they need that ABC, they need that failure, they need that drop, and then they need this failure, and then we would see a downturn. So, the bears have a lot of work ahead of them before we can even start talking about anything bearish whatsoever. These March lows are going to be important for the bears to break to even get the ball rolling. And then the April 25 lows are extremely important to the bull market. If those break, be very worried about where the market is headed at that time. Um, so right now, nothing crazy has happened.

[00:05:42]We're still looking for the same paths.

[00:05:43]They pulled back a tiny bit, but nothing to make you go, "Oh my gosh." Just some down days and now they're kind of grinding it back higher. Over on the NASDAQ, they've already hit the 764. So, anything back over uh today's high is going to likely lead us to new highs. um and probably 30,000 directly. I would say that if they get back through the high, they're headed to 30,000 pretty directly and maybe a little bit above.

[00:06:08]Very rarely are they going to give everybody the oops the 30,000 and uh gift. And what I mean by that is number one, on the way up, very rarely are they just going to run it straight to 30,000.

[00:06:19]They pulled back first, right? And on the way back up, very rarely are they going to hit 30,000 and drop right away.

[00:06:25]They're very likely to go through 30,000 a little bit and then drop some at some point after that. So, don't think that just because 30,000 is a psychological round number that they're going to drop the second that they reach it. Um, they could consolidate for a few days. They could spike through it. They could come up just short of it. Um, all of those things are possible, but they rarely just give you it touches 30,000 on the penny and just drops like a rock. That's hardly ever what happens. So, uh, we are looking for 30,000 and especially if they get back above today's high, that would be a strong indication that they're on their way back up to that level or toward that level, I guess. not back to, they haven't gotten there yet.

[00:07:00]Um, same concept on the NASDAQ. We're looking for an ABC down to the 382, which is down around 27600 and then higher from there. Um, that would also take us to 30,000 plus and then the same other concepts of bigger breakdowns where uh the move up is an Awave.

[00:07:17]Remember, we are dealing in diagonals right now. So, the move up would be an Awave. you'd get a Bwave down into 264, even as low as this consolidation down here around 252 and then higher from there. Um, which would take us would target well over 30,000 at that point. So, we'll just have to keep an eye on exactly what's happening right now. Again, just a couple of down days that have gotten boughten back up and are close to breaking back through key resistance.

[00:07:41]So, uh, back over today's high is the key. If they get back through that, I would look for 30,000. Uh, not tomorrow, obviously. I don't think they're going to go up 600 points tomorrow or 500 points tomorrow, but um Mon or Tuesday or Wednesday of next week. Remember, Monday is the holiday. So, we'll see what happens tomorrow, but they tend to be bullish on holidays. That would be my overall lean and always is on holiday weekends. Shorting the market into holidays is always burning money.

[00:08:06]Okay, we got a couple of requests here.

[00:08:08]If you got questions about any other chart or any of the charts, ES or NQ or just anything in general, go ahead and type them in. I'm happy to answer them.

[00:08:16]Uh, we got a firm holdings here.

[00:08:19]Remember, the first two charts that are put into the chat are the ones I'll break down. This is the daily chart.

[00:08:24]Let's zoom a little bit on this so I can see it.

[00:08:30]This looks like a corrective move higher. Let's just look at the fibs real quick just to double check that. But it looks like it's in a corrective move to me.

[00:08:41]Um, okay. So they do have the makings of a leading diagonal here. So uh remember leading diagonals target about the 1764. They are also overlapping. They are also threewave structures. So off of this low you can have your ABC for one, you have two, you have your ABC for three, four, and then five back up here to the six 764. Uh and then they've pulled back sharply off of that which is what happens on diagonals. You also have this really big diagonal structure here um that they filled out. This megaphone diagonal expanding is what they call it.

[00:09:16]Um very often this will go deeper. So they could have definitely bottomed here uh wherever this is 42. Um this could definitely be the bottom, but very often you'll see diagonals retrace much closer to the lows down here around 18. So I would not be shocked to see this first.

[00:09:32]Uh probably down into this support around 31 and then 24 would be my next two targets down. Uh, but if they're able to get back over 84, then I would start to call this a breakout to the upside. Um, and if we look at it from a fib standpoint, if that pullback was all you get, which is a pretty decent pullback. I mean, this is a deep pullback, which is what you want on a diagonal anyway. Um, you would look for him to hit about 87 to 98 here for a wave one of three. And then you'd look for a pullback and a breakout towards 155, which is up around this high right here. Um, and then you'd look for him to reject that the first time through. and then back up towards uh 191 and so on.

[00:10:09]Now this is on the daily chart. So this will take months and months to play out.

[00:10:13]Um but in general that's what you would look for given this pattern. So uh right now my lean because of they've hit the targets and they've got a really good structure here and a really good diagonal setup is that this is a leading diagonal and they will find support above this low over here. Now where exactly are they going to find it? Well, that depends where they may have already found it. You would look for a fivewave structure. Let's see if we have any kind of structure off of this low real quick.

[00:10:42]Uh let's see. We have a one, two, three.

[00:10:45]Yeah, I mean this I I would lean right now as long as they can hold this low and really above that. Let's see where the the 618 is. I would be looking for a bit of a pullback. Um as long as they can hold 53 to 49 and I'd prefer 53. You want it to be stronger and there's a ton of support right here uh at the 618. I don't really want that tool. I want this tool. Uh at the 618 there's a ton of support. There's this high here and this high here and then they broke above it.

[00:11:11]So very common for them to come back test that breakout. It's also the 618 and then break out higher from there. So my lean right now I never am very confident that diagonals will play out.

[00:11:23]Um but given the structure and everything that we've got with that diagonal, that would be the primary path that I'd be looking for. If they break down below 53, I'd start to worry that they're going to break this low and come lower. It doesn't mean it can't be a diagonal. Remember, they can come lower than this. They can come all the way down here because diagonals sell off quite strong. But this structure right here does look pretty decent. So, um I would have a bullish lean overall on this chart.

[00:11:52]And the second one is ESTC elastic. This looks bad.

[00:12:02]I would not want to be involved on this right now. Not yet. Anyway, just because a stock's at the lows, by the way, doesn't mean it's a bad buy. In fact, off of this support, it's not a terrible buy at all, at least for a bounce. Um, they're very unlikely to just come down and take out this low with force the first time into it. So, even if they take it out, what I would look for is a recapture of that low and then uh and then a breakout to the upside. So, they haven't taken it out yet. still the low.

[00:12:32]Um, overall, this structure doesn't have a great fivewave move up. This looks more corrective to me. This is a very deep pullback here. And uh, and then they're just barely holding on to the support. So, this would be way too big of a wave two in my opinion. It would not fit the overall pattern. So, if I looked for anything here, it' be a corrective bounce uh off of this low.

[00:13:00]So, I would expect a bounce and they they've already started to bounce. So, uh just a charting tip and a price action tip for you.

[00:13:09]Um when you have support, so if we just draw a straight line across from this low, right?

[00:13:16]When you have support and they come up just short of it like they did here and they start to bounce away from it.

[00:13:23]If they give you a substantial bounce, which they kind of have, uh, not just a couple bars or, you know, a day's worth of bouncing, they've they've given you quite a few days of bounce here.

[00:13:34]If, and this is a big if, if they come back down here, this is not this, this red line is not going to be your catching point. They are going to break this red line when they come back down.

[00:13:43]So, they can they can do support three ways. They can do what they did here, come up just short and go higher. they can spike through it and do what we call a failed breakdown. Come back up above it like this and that's a great entry.

[00:13:55]That's one of the best entries you can get in the stock market and um they can come exactly to it, tag it and go from there. When they come up short and bounce away from it if they come back to it to uh test it, you can almost always count on them breaking that low. Now, does that mean that the first time? So, let me explain what I mean by that so you don't get confused and overtrade it.

[00:14:20]Does that mean when they come if they come back down off of the daily 100 here, they come back down, does that mean they're not going to bounce off of it? No. They probably will still bounce a little bit, much less than this bounce, right? And then come back down and break this low. If they do that, then I'd look for that failed breakdown setup for a long. Um, and if they can't produce that, then they're going to sink. They're just going to fall off.

[00:14:43]Um, but those are the types of reversals that you really want to see. They're great, great, great places to trade. But very often when they come down and they're short of support and bounce away, when they make the return trip, this is no longer going to catch them.

[00:14:56]They're going to break it at least a little bit. Maybe not fall through and waterfall, but this is not going to be where they stop.

[00:15:08]All right, those are the two charts for today.

[00:15:12]ticker hems. Sorry guys, we've already had our two in. Is Tesla leading diagonal? You can watch I think yesterday we did Tesla. You can check it out over on yesterday or what was yesterday? Wednesday. Tuesday or Wednesday we did Tesla. So you can check it out on the that video uh if you want to go see what Tesla's doing right now.

[00:15:27]Uh overall, just a couple other notes in the market since this is the last day for um the next four. The um let's go back up here. The 30-year fell down a little bit and you want to keep an eye on that. The longer it stays over five, the bigger a problem that is for the market. And if they continue to break out like they have been doing, that will be a very, very big problem for the market. Um, SMH still doing its thing. It rebounded today. It was down about 2% early and now is up about a half a percent. So, no weakness and no big-time weakness in SMH yet.

[00:16:01]That was uh another point. And then, uh, banks still not participating in the rallies. They were flat today and down most of the day. So, um, banks are still very weak and that is a very big problem for the markets as well. Remember when bubbles happen, in fact, uh, Thomas Atkinson does a great job over on his channel and yesterday he noted that, uh, the top 10 stocks comprise 41% of the market right now. It's the highest in history. It's the most com uh um it's the most condensed market in history and it is the biggest bubble in history and we it has the most leverage in history.

[00:16:38]All of that always 100% of the time leads to a major failure in the market.

[00:16:43]So risk is high right now guys. Um this is a concentrated market. it is very very very um heavy in AI and when AI shows any weakness whatsoever uh that is going to be very very ugly for the markets.

[00:17:05]Do you think health stocks have a huge lag? Uh I don't know. I don't follow health stocks like in depth honestly. Um so I don't know. I I I can't speak to that educatedly so I won't speak to it.

[00:17:17]One thing you'll get here, guys, is you'll get what I know. And and when I don't know something, I let you know that, too, because I'm not here to pump you full of crap. I'm here to give you my opinion, which is all that is. And if you disagree, no problem. Doesn't have to be for everybody. But I'm not going to just make up if I don't know it.

[00:17:31]You're going to get the truth from me.

[00:17:32]And you're going to get, you know, uh, today we had a great day trade. The last three or four days we haven't had hardly any day trades because the market's been very one directional. So today we had a really nice day trade winner. Um, you know, all of that stuff that I tell you is is is as accurate as I can be with it. I'm very upfront about everything. So, if I don't know something, I'm not going to give you a bad information. You can find that information from somebody who does know about it. All right, guys. That's it for the week. Have a great weekend. It's a Memorial Day weekend. Go out and swim or picnic or barbecue or do whatever it is you do. Have a great time. I'm going to have some bourbon and barbecue and hang out with the family and uh celebrate the end of the school year with my daughter.

[00:18:13]Have a great weekend everybody.