When markets become significantly extended above their 50-day moving average (such as the NASDAQ's 13.1% extension in May 2026, which was the 10th largest extension in 27 years), prudent investors should lighten their positions to protect gains while maintaining exposure to potential continued upside. This approach balances risk management with the opportunity to participate in further market strength, as demonstrated by the firm's strategy of reducing positions from 90% to 35-40% during periods of extreme market extension.
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All right. Hello everyone. Good evening.
Welcome back to um our Maddox market musings. Thanks for joining us all. Um we are uh you know excited to get together again and share our thoughts. Roy and I um you know obviously we've been and everyone has sort of been anticipating some kind of pause, right? Some kind of digestion. Things have gone straight up since uh really since the follow through day. And um you know, we tried our best to lighten up the load ahead of that.
And um you know, maybe we just got a little bit of a a pause day today. Um you know, Roy and I are going through things and we'll go through a lot of what we're looking at to determine now here, right? Literally one down day um in the NASDAQ that uh you know got ugly in the middle of the day, but by the end of it recovered really quickly and is kind of showing us um the underlying strength right now. uh for that uh you know you know for for the market in general. So um you know we're going to go through the the pros and cons here.
You know we we own some things obviously we've um pressed some things but um we'll go through again like sentiment things that we're looking at and breath things that we're looking at to um give us you know inform us a little bit of our view on the uh trend of the market and then we'll go through our buy list.
you know, we've got um you know, we've got tons of good merchandise. It looks like things are incredibly strong. Um you know, things are, you know, slightly extended. Obviously, there's there's a number of these semiconductor stocks that um that are cons that are um extended, but nonetheless, you know, they've had this sort of record run. Um and we don't necessarily think it's over uh by any means, but um you know, we're going to figure out a way, you know, for us to to get positioned in some of these leaders again. Um because, you know, the market has shown um you know, a really really powerful uh start we think to the uh to the rest of the year.
Oh, my excuse me. I also, you know, wanted to point out, by the way, you know, the uh this is our first call. We we officially closed on a merger. So, we Roy and I were a part of Integrated Financial Strategies and uh we merged with a company called Prosperity Wealth and we are now combined to be Exodus Wealth. Um so, I wanted to highlight here the uh the change of email address.
Um, you know, fortunately, if you have our old email address, everything will just be forwarded straight to the same thing um to Exodus Wealth and then we'll reply from this new email address going forward. So, we just got set up with that. So, um anyways, just, you know, make a note of that if you ever uh email us, especially if you're a client of ours and are looking to get in touch.
Um, this is our new updated contact info, but uh, you know, if if you're here for the first time, this is our meetup group. We've been hosting this for, uh, many, many years now, and we host this on the second Tuesday of every month. We were based in Charlotte, North Carolina, and, uh, before I moved back to Charlotte, Roy was hosting this in person with a number of people in the area. Uh, and since then, you know, we've gone online to reach as many people as are interested. So that's been great and you know now we have this the YouTube platform that we're using. So uh you know it's it's something that Roy and I have been passionate about. We just try to get together with like-minded people and we'll share our thoughts and we're always here to answer questions and um we're help you know we're trying our best to to identify these leaders and uh the bull market because we want to uh you know identify them and move the needle for for ourselves for each other for our clients. um and make a difference, you know, make an impact on their lives by by having some outsized returns. Um and so, you know, we look forward to to you guys joining us in the future if you're you're new. Um we will send out email reminders to you if you get on our email list and I'll add you guys to that. Um or I'll drop a link where you can add yourself to that if you're interested.
Uh and by the way, you know, this isn't financial advice, of course. We're just here to uh you know, this is our our this is our views. We're not recommending things, but we, you know, we're going to share our thoughts and we're going to share, you know, what we own personally and uh what we own for our clients and what we're looking at buying. So, uh do your own research, talk to a financial professional if you're looking for advice, but um you know, we're just here to discuss our thoughts.
Um you know so a lot of this uh I guess our thought process and our approach to the market is grounded in investors business dailies um how to make money in stocks. So that was that was written by William O'Neal that book and uh within that book the CANS slim acronym is a you know a very uh important theme and it's an acronym for the criteria that William O'Neal identified as the most important things to look for in uh the leading stocks. So for us you know this is a really high level uh 7point uh list of things that are key to identifying those leaders. So uh study this you know read that book if you haven't yet and um you know get to know the these these key criteria.
So for us we always talk about and just briefly give an an overview of our process. We have the three pillars of technical analysis, fundamental analysis and macro analysis. Uh with technical analysis if you're um not familiar right we're talking about price mostly and trend. the most important thing there.
We'll talk about breath and sentiment to some extent and then some ratio analysis. Uh this is a really good list of um pretty much I think all you need when considering technical analysis. Uh beyond this there can be um a little bit of information overload, but this is a really good place to start if you're looking for technical indicators in your tool belt.
Now, fundamental analysis, that's really talking about the the companies themselves and how they're positioned to grow revenue and grow earnings. Um, again, that cancelling acronym comes into play here. Uh, very very, you know, good highle things to look for. uh other things on market surge from investors business daily our charting platform that we use uh that's got different composite ratings uh relative strength ratings EPS and it'll show things like sales margins and return on equity and um you know some of the key things that you know we want to pay attention to for the fundamentals of the companies we're trading and then macro uh we subscribe to hedge eye we we want to have a a framework at least to understand the economic regime we're in. Uh he divides it into quads and it's really just about growth and inflation, the two key things there. Um so that's a you know really robust u model for the economic outlook, those two very key things. And really what's important there too is the policy implications of um you know of inflation and growth.
So, you know, we we um at least like to have them for context. Um and especially, you know, want to, you know, I like to know where there's certain quad pending quad pivots perhaps um in the near future. So, you know, right now we're kind of in this quad 2-ish environment. Um clearly, you know, there's a lot of exciting um you know, moves in the in in equities at the moment. there's a lot of um there's a lot of inflation being baked in to the outlook with oil prices elevating. Uh but that is generally, you know, a very good uh investable market regime. So, um, you know, Roy and I will will talk about why we've, you know, we've got a number of things on our list. And that's what happens in a really good economic regime is you have a lot of a lot of stocks, um, setting up and working higher. And um, and yeah, that's what we'll we'll get into a little bit. Uh, I I wanted to share this QQQ chart. We always um, you know, sort of mark up this chart a little bit. uh the last month if you wanted to see we went over how we got invested um really from 0% to I don't know 90% essentially in the these three days uh on that follow-through day and I think that was a I mean I think that last month was a great uh was a great you know presentation of how do you pivot right because we went again from 0% % to really getting involved uh rather quickly. Uh we had this run and you know maybe we got stopped out of a couple things here and there, but in general um we lightened the load actually quite a bit on this day.
Um which you know in hindsight we we can maybe talk about that more, but uh which ended ended up being two days early, right, to uh really take a whole lot off, but we ended up taking um taking some off. you know, we were getting at these to these levels of historic extensions for a number of different sectors in the market in general. Uh so we'll talk about that. You know, what were what were we looking at um to, you know, warn us, hey, look, we the market does need a breather. Uh so that's you know that's that's the day there where we you know made that decision and slightly premature uh by just a couple of days but nonetheless um we'll we'll go through why uh we were looking at this the NASDAQ spread versus the 50-day moving average.
So this blue line is showing you how far above the NASDAQ is versus its 50-day moving average. Uh I think on May 7th is when that peaked at about 13.1% here.
This orange line is the uh 95th percentile line.
So once you get above there um you're in that n you know you're in the top five percentiles of extension. Uh 11% actually was the top uh was the top sorry this is the 90th percentile. 11% was the 95th percentile.
So just right here was the 95th percentile. And then up there, I'm not sure if that was uh hit that 99.7% or so, but um you know, extremely extended on a standard deviation basis above the 50. The last time we saw that level of extension um was back here. This is actually May 20th, I think, of 2020 or or so. We'll I'll let you know when we go uh review that. But I did want to uh go there and uh use that as just the most recent time to kind of review and say, "Okay, what could happen?" Um what could happen there? There's a number of times this happened. Um we've been this extended.
Uh but it was um nonetheless it was a very extended period of time over the 50. Uh what I did is I looked back at the last 27 years here of uh extensions of the NASDAQ over the 50-day moving average. Uh you can see, you know, historically from 1990 to today all those different uh occurrences. And then maybe more importantly and more helpful is if you rank them uh in this order, right? You can see the uh 2026 was actually the 10th largest extension over that 50-day moving average so far. Um you know you look at some of these uh observations and you know there are definitely some unique and you know significant dates here right 1999 we of course we know that and 2000 we know we were in these kind of bubbly periods. 1998 still internet bubbly periods. Um you know 2009 coming out of a major major correction. So you have these really quick um you know uh bounces or not you know thrusts off the low after being you know really really depressed. Um 2020 obviously same thing and then 2001 2002 of course you know while the market was getting uh you know getting hammered uh over the course of those two years there were some serious um significant rallies that took place there. And so, you know, with that, you're going to get some heavy extensions in in that really long, uh, secular bare market. So, um, you know, with that in mind, yes, we understand we were we were quite extended there at 13.1%. We took a little bit off. I think we went to like 35 or 40% long. Um, today we're probably 35 or 40% long. Um, as well, uh, with, you know, a lot of, um, potential setups around the corner. Um so we lighten that load there but um just some context right yes it's very that was very very meaningful it was quite extended but um it is not qu you know it's that look this is a this is a whole different type of extension 21.3% that will be that will be unfathomable that will be dizzying if we get to that level because at the same time that you're getting more extended the increase of that 50-day is also going to be accelerating so you know, the velocity of that move has to be for like 3 weeks of like really really um strong acceleration so that you can outpace that 50-day that is also rising. So um anyways uh thought this was interesting to take a look at.
Uh so May 2020 right here, this is May 20th. This is that other time that we were maximum extended in 2020.
Um, you know, I thought this was interesting, right? Because it's not like we're we're certainly not calling for the market to look, the market doesn't need to come in three or doesn't need to come in 5% even, right? It really doesn't. Um, it's such a strong market. We just had about a 2.4% I think pullback in the the cues at least, maybe 2.5 uh the last two days. And in these really strong uptrends, you don't get, you know, a whole lot more than like three 3 and 12% in the indexes. So, um, when you think about that, right, if if you're down two and a half% today, um, that's over halfway of a corre of the correction in one day. Um, and you should quickly, you know, start to identify some of those outperformers, right? So the most positive thing that comes out of this type of day is is identifying the next relative strength leaders, right? Maybe it's more of the same. It certainly could be. Um but there's uh it does it helps. It helps a lot. Um you know, some of these software names were all exploding and following through. Um some of those, you know, gave back a lot of their second day follow-through uh gains today. Um but the strongest did not. You know, Rocket Lab, that comes to mind, right? That's that's had a monster move from earnings. And I think that was slightly green today. Bloom Energy is down like one and a half percent. Uh that was down like one and a half% today. And um you know, a couple of these other ones uh that again we we'll just go through, but this you know this is not out of the question, right? this type of move uh of one two three you know four five days basically a sideways that might be all it takes um in these you know given the strength of this market so you know keep that in mind that certainly you don't have to get all beared up um you know is there a good riskreward for the memory stocks and Intel or um you know AMD necessarily I'm not so sure um you know still that those are Those are quite extended setups still. But um nonetheless, you know, keep this in mind. This could continue uh just sideways and then ramp higher a bit more for um you know, the coming weeks. And if you were shaken out of things today, for example, uh no harm, right? That is uh we've all been shaken out. Roy and I get shaken out all the time because you never know when the when the lows are in uh in reality, in real time. But um the good news is it does look like we're in this, you know, a really really strong environment where um if you miss if you miss two, you're going to see five more.
Um so, you know, don't don't be discouraged if if you feel like you missed a couple.
This this uh this experience is is quite discouraging all the time and then a few times you really get it right and you move the needle. So, um, you know, I think we're in a it looks like we're in a pretty forgiving, uh, a pretty forgiving market if we had to to guess.
Um, some other things that I was paying attention to. This is a, um, a chart shared by this guy. Um, a real simple air, a real simple Ariel. Oops. Ariel Hernandez. Uh, he's a guy I follow on Twitter and he's worth a follow for sure. This is the QQQ uh chart and he uses um tradingview.com and he really has got me into this uh average true range percent multiple from the moving average. So that'll look at the average true range of the QQQ here over the over a 14-day period and it'll see how extended how extended you are over the 50-day. And every time there's a yellow dot here, you are 10 times the ATR over the 50-day moving average. So, this is a good thing to normalize, you know, for um volatility of any security, right? Because obviously the the uh QQQ can become massively more extended than like Goldman Sachs uh most likely, right? It's just it's a more volatile asset. So when you normalize for that trading range um anytime you get 10 times the multiple over the 50-day um this yellow dot shows up. He has that in this custom indicator on trading view. And so this happened on Friday and the QQQ that's the first time in history that the QQQ has been 10 times that multiple over the 50-day.
Um so certainly you know things warranted a break with with that flashing for the first time ever.
Um this is the semiconductor index, the SMH. This also flashed that on um this was May 7th. So what was that? Thursday and Friday where it had uh Wednesday, Thursday, it was flashing that warning signal as well. And so of course some of these components were flashing this the whole way up. you know, Intel was flashing this for for six to eight days or whatever and things like MXL were flashing that um level of extension there. So, um it's a good little way to to look at things and say, "Hey, um you know, anytime you see that yellow dot, uh you know, you guys can look into this on your own for for Trading View or or figure out a way to to calculate that in your in your trading platform perhaps.
But uh anytime you get that that signal, I mean it's worth uh lightening up uh and you need to be thinking completely opposite, right? You don't need to be thinking, hey, how much more can I get out of this stock? You need to be thinking, hey, it's prudent to take some money uh off the table there. Uh make sure you're not going to, you know, be unhappy with yourself when that thing comes in 10%. Which I mean, the SMH or the SOXX maybe came in uh 7% today, right? In a day. So, a lot of these stocks were getting hit really hard today. And you know, that's that's kind of tough to watch a lot of those gains um you know, evaporate on you in in a day. So, um it makes a lot of sense to um to lighten when you see those those dots appear.
So, when I'm looking at the macro, one thing I was going to touch on is this USO. Um this continues to bounce and rally and look at, you know, look at this pretty strong uptrend.
Um, lots of volatility here to be sure, but um, since the breakout it has, um, I mean, I think the strength and persistence of it has been surprising.
Um, clearly, you know, it's telling us the straight isn't open. There's still some tension there. We don't know. You know, the oil market's telling us we we they haven't found a real resolution yet. Um, and while that's happening, there's still going to be this dislocation in the oil market, uh, where, you know, there's not enough supply coming through that straight. So, um, want to keep an eye on this. You know, we're we're really just a few percent from getting to an all-time closing high on the USO. And that's, uh, you know, that's something to pay attention to. Roy and I kind of have said that, you know, the market sort of shrugs off oil until it doesn't. Um it's, you know, it's unclear, right? May maybe it's overbought here and and we get a um you know, a pullback in oil and that's what gets the market going again, right? But, you know, if this goes to all-time highs, I think that's kind of what makes I think that's what gives the market jitters. You know, every time you're making a new all-time high in things like this, um you the market is going to probably stop ignoring it. Uh if that's the case, however, if the market doesn't ignore it or if the market does ignore it, right, let's say we wake up tomorrow and USO is at 155 and the market is flat. Well, then I think that's your signal then that you know we're we're going higher uh in in the cues or in the market, you know. So, um I still want to pay attention to this. It's not the thing that's driving the market at the moment, but you never know if it's going to take the driver's seat. So, um, that's why, you know, I always I'm always paying attention to oil, uh, for now, you know, until it's until it's really broken lower and, um, the trend is is back down.
Uh, you know, and of course, why do we care? You know, CPI, it's a it's a regressive tax on people. So, when prices are going up from oil, uh, it's it's certainly not good for the consumer. We know that. Uh again, the market seems to be so strong at the moment, right? It's ignoring this entirely, but you can see this, you know, this is a massive acceleration.
It's not something that the market we, you know, we're not going to be comfortable with this if it continues to to grind higher.
Uh but uh for now, again, this is just something to pay attention to. We're at 3.8%. They just reported that this morning. Uh 4.2% 2% is what it's going to be in May it looks like based on the the current now cast. So further acceleration and a forehandle you be be aware of that right you don't want to be caught uh confused when this is this is known information that generally this is where inflation is is expected to be um and you know with infla oil inflation all that stuff really what that goes into as well is is bond prices and bond rates. So, um, same thing, oil and, uh, and 10 the 10-year Treasury, right? If that breaks out, uh, that's the whole that's the thing that I think gets the market uncomfortable, right? If it if it actually breaks out and then you don't know where it's going, right? Um, if it were to, you know, hit 4.5% and fail, um, that would probably be a great thing for the market, right? But if you do get some strong breakout and you have this strong trend in in rates, uh the you know I I don't believe the market can just totally ignore it uh at a certain point.
But for now um for now what I I find interesting about that uh I I have this 4.2% marked right that inflation rate is marked right here for the month of May. our current month. And we've got the one-year Treasury yield and the two-year Treasury yield uh charts here. You know what I find interesting is we're actually we actually have negative uh real interest rates right here.
Uh and that's probably the first time in a long time that we have had that. I don't I was going to look that up and maybe I will at some point while we're um going through individual stocks, but uh you know that's an I think that's an important development, right? All of a sudden you've got these you know your one year, two-year CDs, your money markets, your whatever that aren't outpacing inflation anymore. Uh you know, you wonder is that you know that's that's certainly an incentive to continue to see money move into risk assets uh there. So, you know, I do think that's important. Um, right at a certain point, you'll you'll that that information will disseminate into the public into, you know, the people will will understand that they're not um getting much of a yield, right? And that's kind of how you you push people into the riskier things uh over time and fuel more of a bull market there. So, um you know, two things can happen. And of course, inflation can come down and we'll see those positive real rates on the short-term curve or um or these rates can go up and that would not necessarily be great for the market. I I wouldn't think either. So um yeah, anyways, keeping an eye on that.
So, we'll talk about the other things that we saw like that were giving us some pause as far as, you know, being overly aggressive the last 5 days or whatever. This is that NAIM, the the National Association of Active Investment Management uh survey down here. It hit about 97%. Um, we always say that when you see 100 plus, that's a really good that's a really good sell signal, a really good lightening up signal. um 97% obviously not 100 but for us given the historic you know rally we just experienced you can see it here on the chart you know these these six weeks really really really strong weeks um again we just that was one of our inputs to help us you know make that decision to lighten up a little bit um again not a super extreme in that in AI IM we're in this greed section not super extreme there either um so yes while we're a little bit frothy We understand um you know we're kind of flexible in either direction at this point. You know this is one of those things not super uh aggressively greedy there on the CNN fear greed index and here you are over time uh checking that out that that indicator um just to give you some context.
This is one of those things that um I I I think is a very good indicator for you know extremes. we are in that complacent zone again uh with this put call ratio.
So a lot less calls are being bought or a lot less puts are being bought versus calls here. Um so that's you know that's an aggressively complacent area to be in. Uh this is the sorry this is a fiveday moving average of that put call ratio. So it smooths it out over five days. Uh this is a 10day moving average.
So the longer duration here, you know, showing you that, hey, over a longer now 10day period of time, we're actually starting to see the complacency uh creep in. And so it's just below that level that we look at of 08. It's right there. Um you can see what happens, you know, in the past. We've had it we've had it of course come lower um in both those instances and and that did lead to some kind of pullback. Um you know, so we'll see. Again, every day everything's changing. You know, we did just have a we just had a 2.2%, you know, intraday correction for a couple of hours. You know, I don't know where the put call ended up today uh yet. So, all that stuff could change um on a dime, but nonetheless, this is uh this is something where uh it's again, that's the that's the zone. That's the complacency zone to watch for. And it's it's heeded uh it's done us well to heed that warning in the in the past. So that's what we did.
Uh this one I think this shows some indecision. This is the AI bull bear sentiment survey. So bear or bulls have come down. This is the bulls uh reading down here at 38%. The bears have also come down to 33%.
So there's um it's I don't know there's some division I guess and then some a lot of undecided people at this time right because we can all see the market's gone up really fast um and we're all kind of bracing for for some kind of digestion. We're all we all want it to happen because we want to get it over with to some extent, right? Um but this is not telling us much um you know decisive information. Uh the VIX as long as that lives below 20, you know, Roy and I see that as a very good level, a very good um environment for us to make money by, you know, buying dips. Uh that, you know, there's good um there's a good chance that this rally continues as long as we're below this 20, right?
We don't want to um once we get above that it gets a little bit choppier.
And then Roy and I also, you know, last last minute we were talking about this Mlelen oscillator and saying, "Hey, you know, we're not we're not overbought by this standard at all anymore, right? So this is one of our preferred oscillators. It's actually slightly negative now. You know, a lot of what that looks at is individual stocks. And so the Russell had a bit of a weaker day. Um the retail banks we were noticing, you know, those have had a few weak days. So that's a large that's a big input into these um oscillators because it's it's talking about just it's not market cap weighted. It's just the number of stocks um in there. So that's come down uh on that oscillator.
This is also negative. This is the NASDAQ Mlen oscillator. So that was the New York Stock Exchange one. This is actually the NASDAQ now. Slightly ne slightly negative here.
um which you know I think bodess well for hey how you know how much how much of a correction and pause do we really need well maybe not a whole lot um and I'll talk I'm going to share this too uh this indicator that I come that I've come to like from uh crowded market report and Jason Shapiro this is the commitment of traders report and what it does is is it reports every single week how many speculators and how many commercial operators um are long in different futures positions. Um this is the S&P 500 futures positioning and in blue uh we have the we have the speculators but this is not this is an S&P 500. This is um I think this is actually that's actually Bitcoin and it's mislabeled so forget that they all seem to link to that. You know what?
Hold on a second for me.
I must have messed up a link there.
But what I'll show you then is the original um the I just have those three, right?
Yeah.
Pull this up. because I do find this interesting. This is what makes me think we've this is part of what makes me think we've got more room to go. Uh this is something where we're not crowded whatsoever in these in these index positionings for the indexes um or in futures. So here's the NASDAQ.
I'll try to zoom in for us and yeah was linked to that.
Um what you have here is the S&P 500 uh positioning. We're net short. The speculators are net short. Okay. So that what that tells you is there's definitely some some room to to run in the S&P 500.
Um when you're this short, that's you know that's a positive thing for a for the trend to continue upward. Uh for the Russell here we are too. Uh speculators are net short the Russell as well. Uh, another great thing and then I'll show you the NASDAQ where we are the blue very very very slightly long in the NASDAQ right here. Um, you know, I find this to be a really good indicator, you know, when it's crowded.
Obviously, that's that's the whole point. um the you know these extremes.
This was October uh 14th, 2025 and this was November 25th, 2025 where we were very extremely long and of course in October uh when that was like already a record right here in long positioning. Um we you know we all know that the the five months that ensued following that were extremely difficult uh in very very choppy condition. So, um I do, you know, I've seen this this u indicator sort of be important at extremes. That's really what it's all about. Uh and right here, you know, nowhere near that extreme at all. Very neutral. Um you know, that makes me consider all these things when when we were noticing all these, you know, record extensions, you know, a top 10 extension of the NASDAQ over the 50-day.
Um this is somewhat of the longer context window that I think tells us man we might be in store for something really really powerful um ahead and we might you know we we this run isn't over until we reach extremes in these positionings.
Um so you know that keeps me very optimistic going going forward for the next uh I mean several months really. Um, so you know that yeah, keep that in mind while we've uh we lighten the load.
We're, you know, Roy and I have a have a great list of of candidates that we're going to buy um I'm sure over the next several weeks u where, you know, I think we can move the needle um quite a bit this this year. you know, things are coming together for um you know, perhaps a really really strong run after we just have a little bit of a little bit of digestion period.
And honestly, the the lighter and more shallow the digestion this is, the stronger and you know, better the outcome is is going to be um you know, most likely in the near term. So, with that, I mean, that's all I have prepared. um you know, Roy and I we'll just we'll jump into the stocks um that you know that we're looking at.
Uh I think is pretty much where we'll start. What do you think, Roy?
>> Yep, that sounds great. Uh uh folks, uh I want to thank you again for attending uh our meetup. We certainly appreciate the uh the participation and this is again as Wesley said, this is one of our favorite things to do on a month-to-month basis. It keeps us on our toes and also it's our way of giving back to the community that follow us on Twitter uh all across the the nation and all across the world. So again, we thank you for spending the time to uh go back and listen to our videos and study them.
Hopefully Wes and I provide you with just some food for thought um and uh just a a way to help you with with your personal process as we share our personal process of of how we what we think about the market, how we buy our individual stocks and so forth, how we protect our gains and how do we manage the portfolios. So hopefully uh you all will be able to enjoy that and take something from it. That's our aim just every single month. Um Wes Wes, with that, let's pull up our buy list. This is our cold buy list and it's really based on fundamental and technical factors that and this is a fresh list for us.
And uh so we, you know, we uh call our list from, you know, 5,700 stocks all the way down to uh 200. And then we break that down to 124. Normally in our portfolios, we might have 10 10 10 to 15 to 20 stocks depending on where we are in the cycle and uh whether or not we have traction or not. Um uh we found that the best way to move the needle is to concentrate and you know William O'Neal often talked about concentration and by concentration um he would always recommend that for individual investors you would have you you would put up to 20% of your capital uh you know in a million-doll account in a single position. And we think, you know, that's great if you're managing and you're responsible for managing your own portfolio for doing that, but we we take a a much more flexible approach. We think that you can still a much more conservative approach. What we aim to do is find the true leaders and normally we'll get we'll get several of these throughout the year that double and that's how we really move the needle.
And uh we think that, you know, you know, our our our goal as your goal also should be is to make 20% a year and double our accounts every 3.8 years. So with that often when you get in a great market like we had in 2024, we were able to do that and in 2020 and 2020 2020 we had a fantastic year as well. But, you know, historically speaking, you know, you get an opportunity like this about once every five years. And it's been very unusual because since 2020, we've had three bare markets. And and and rarely does that happen with that frequency. So, normally a bare market comes, you know, every four to five years, but we've already had three over the last six years, which is very, very odd. And it's because of that, it's been much more difficult to stay in your names because of the extreme volatility in these names. But these are these are the stocks that we're planning on um that we're planning on potentially adding if they set up correctly, you know, over this over the next few the next few days. So, uh, take a screenshot of this if you will.
And Wes, go ahead and take the page down.
>> Where was I? ASML.
And then, >> so this is in fact our be this is our most current and best list that we're working off of. So, we've got 124 names and it it would be quite possible for us to own certainly, you know, 10 to 15, maybe even 20 of these names, uh, depending on the setups that are provided >> in, you know, in upcoming days.
>> Yeah.
>> Okay. And uh uh Wes, let's let's pull up a few of these names and we we always share what we you know what we own in the portfolio. We'll we'll go through those uh fairly quickly. We only have one, two, three, four, five, six. We have seven names down from 20, you know, in the last 30 in the last 30 days as we've been stopped out of a number of these. And uh Nvidia is Nvidia is uh one of our semiconductor names that we that we really like. It's really been lagging. Uh you know, it's been going sideways for months now, but by by our measure, this stock is going to continue to power its earnings ahead.
So, it's a very very cheap stock based on the fundamentals. And what we like about the stock is it's just broken into new high territory. And we don't think that it's over. This whole uh this whole thought regarding um this whole thought regarding you know AI being over it's not. It is taking that group is taking a welldeserved break and it's going to be very interesting to see what happens in the space. how long that break last in terms of the d in ter terms of the time duration and what type of correction will we ultimately get here. So the the uh you you the most important thing is you can't plow right back into the market after one day of digestion. So we do see where some of the technical indicators that we're looking at such as the MACD uh there it is showing you that momentum is waning in a lot of these leading groups. So be careful there from a technical basis but we're basically going to show you what we own, what we like. That means we would buy these stocks of course if these stocks pull back in in our in our buy list. Uh the next name that we own is Circle and this is a stock that we recently u recently purchased only uh you know in the last couple of weeks >> and we we yeah we actually pressed the position yesterday as you th as the stock broke above the pivot area that you see right there that Wesley's highlighting. This is a this is a trend that is uh this is the prime this is a stock that is in the um that's going to be right in the middle of the in the internet space and sta in the stable coin market. It is the only pure way of playing stable coins correctly and so we have a nice profit going. We pressed it and we think that it can be a big stock.
The caveat mtor is they've u the u uh the senate is going to be um talking about what's the rural west the >> the clarity act. Yep.
>> Clarity act. So >> they're marking it up. I don't know the language at all really but I I'm tracking it here the odds of it getting passed because it clearly matters uh quite a bit.
Um, and these are Yeah. Anyways, this is helpful to see in real time the odds of it getting passed. And uh, so pay attention because it will move, you know, based on more and more rhetoric.
You know, I was looking at Twitter just to see some of these people talking about it. You know, Senator Warren's talking like she doesn't like it, but that, you know, they're all just saying what they have to say. They're all just, you know, performers. um you know acting like they're all outraged about something for just whatever reason.
We know the people against it are in the the bank's pockets and whatever but it's um you know the banks don't like it because I think it's I think it's coming after a lot of their transaction fee revenue. uh they make a lot a lot of money using credit cards and debit cards and uh you know crossber payments and um this is just a better this will this will set the stage for the banks to adopt this technology and uh anyways yeah I'm paying attention because it it'll definitely definitely move the stock so >> this yeah and this uh yeah this stock had terrific earnings about we saw this stock three months ago go when it stop broke out above the 200 day, the 50-day, 200 day, all the averages on tremendous volume.
>> That's really what got our interest in the in the stock.
>> And the stock of course uh went higher and then you had that correction that you can see is there was some debate of whether or not the Clarity Act was going to pass or not. But that goes before the Senate I believe Thursday. So just be aware of that. Yep.
>> But it is showing powerful action right here. Uh you know as the stock is based and we we also like the stock because it's a recent IPO. So it's a recent IPO that's corrected and it's now in a you know in a stage two uptrend. So it's just moving into a stage two uptrend.
And so we would buy the you know we you know we bought this stock in weakness you know over the last you know seven days or so. We we made mention of it on uh on our Twitter account, but if you know if the stock takes out that pivot over there the left of 136.
>> Yeah, >> I think I think that's 13465 I think.
>> But that's that would be uh an additional place where you would add particularly if you shake off the weakness in the in the stock right now.
But stable coins are going to be used to conduct uh you know payments through all throughout the world in a seamless and easy fashion with very very low fees.
That's why it's so uh attractive that >> yes >> I was going to mention you know the payments thing too is is it is uh becoming the AI agent >> platform to transact right so it's the only way that these AI agents can operate with each other you know instantaneous settlement of payments micro payments uh you know one you can do 1 1 millionth of a penny uh if you want and so you know the number of transactions is going to be enormous potentially right that's the whole that's the whole thing if if you know this clarity thing I think is important but these AI agents they're right they're right in the middle of that too or um they've got some tools for them to you know become these autonomous um you know bots with the ability to pay so um you know you can set up a wallet you using their tool tools and and all that. So, um that's all that's really really a huge, you know, unbelievably huge opportunity, right? If if they're right there in the middle of it and they they stand to benefit quite a bit from that agent revolution that we're maybe going to start seeing.
>> So, yeah. So, it you know, short term it's going to depend on what happens from Congress uh this, you know, this coming week. So uh you know just caveat there and you know just be aware of it.
The next stock that we own of course is Bitcoin. So you know Bitcoin's been out of favor for a couple of years now and we think that you know we like the position particularly we think that uh that Bitcoin will be very attractive with these negative interest rates that presumably may be on the horizon. You know again we have the PPI uh we have the PPI the PPI that comes in tomorrow but uh with inflation expected to be 4.2% 2% next month. You know, we think there there could be a little rotation and u you know, so uh you know, we we we have high hopes for this for this to continue to to work. And it this is it's very unusual. Those two positions really along with Tesla, they're very unusual because we normally buy stocks that are closer to their 52- week highs, but there's room for uh everyone at the end as well. So, uh, Tesla, we recently purchased this only, you know, uh, >> yesterday was the first time that we purchased it.
>> Yeah.
>> And the stock, we purchased this stock as it broke above the 200 day moving average. That gave us some uh, comfort that the tech that the technical picture was turning. So you you know you might see the stock come back to the 400 area the 200 day moving average but we you know we we think that again that the fundamentals are can be quite powerful here but the stock is the technical picture of the stock is turning before the fundamentals have turned. So we think that's important you know you know from a an investment perspective and from a trader perspective price is the most important thing that matters. Uh and many times you know price uh you know price moves before the fundamentals get better and we we see that you know potentially happening here and we think it's uh you know we think that the the that the uh the business has tremendous uh tremendous uh domestic uh use available in the in the future. We think we think it's robo taxis and the cyber cab are going to be very very big. We believe >> the next we have is Amazon. Every really don't have to explain this story very much but you can see the stock just broke out. That's why we're interested in the position. Both Amazon and Google are massive massive companies that are uh that are in the cloud. They're also in um you know they're in the semiconductor business as well. So they all have you know a they've got a Microsoft's got Azour um Amazon's got AWS and Google's got Google Cloud. So they're all very very powerful in terms of going to be there too. They're hyperscalers that are going to build all these data centers across the country. In fact uh I I actually saw where I think Google's in talk with a SpaceX in terms of moving you know maybe doing some business. Of course, we hear about moving the data centers to space and Google Google currently is in discuss discussions with the SpaceX right now. So, that's going to be very very interesting to see what happens. So there's of course Amazon, Google, you know, if we rotate here, we think I mean what a beautiful breakout that Google has >> and we think that you know if there is a rotation here out of some of these groups like >> the optical space, the memory space and the semiconductor space. We think there might be a flight to quality and certainly these three magnificent seven stocks. the three of course that we like Google, Amazon, and Nvidia.
>> So, we think this is setting up uh it's, you know, Wes and I were, you know, >> we're pondering whether or not, you know, these stocks are going to stop at their 10day uh EMA or where they go to the 21 day MA, you know, uh EMA. So, it's going to be real interesting to see what happens in subsequent days. But we do like it here and we do like it if it if it does pull back to the 21day. We think that we're just in the beginning of this power trend which is a powerful move that's go taking place in the indexes that are going to support all these stocks. We think many of these stocks going much higher. So this the uh uh you know we're we're very very bullish. We just need to see if the market will pause here and see what opportunities in these 124 stocks that we've listed. We want to see uh what opportunities are available will be available, >> right? And yeah, maybe I mean you guys are probably seeing you know we do own we own these really high market cap things. We, you know, with the exception of what circle and sphere basically right now, um, you know, we sold a lot of, we sold a lot of the memory stocks, um, you know, recently in and chip stocks and, um, you know, optical stocks and things like that. So, uh, you know, for us, we were kind of bracing for some kind of consolidation period, and that's, you know, but nonetheless, those things will go over on our watch list are, you know, they're they're still going to be on our, you know, near the top of our list, right? Um, it's just a matter of again, just get the sideways action we're we're looking for just to get involved again with, you know, with low lower risk entry again. So, um, yeah, because these are, you know, nothing crazy about these ideas right at the moment, right? But we're sort of that's that's what we did.
You know, we we lowered the volatility of our portfolio quite a bit. Um, you know, after making some some decent progress, uh, you know, in the last month or so.
So, um, anyways, just wanted to share that. Um, and I'll just mention I guess on this holding this is XBI. Same thing.
It's, you know, lower volatility, lower correlation, you know, type of position too. We were thinking, um, you know, when everything comes in at once, that can be quite quite painful, right? We, you know, we owned it, we owned Micron, we owned Western Digital, we owned Sandis, um, and Lum and, you know, all those things. Um, that got hit pretty hard today. And um while we maybe didn't squeeze as much out of it either, we you know we we certainly saw the possibility for these kind of higher volatility um you know a pickup in volatility in those leading stocks given how extended they had become. So you know this XBI it's a it's a um index in an uptrend in a different sector. Um so that's why we you know we like it in the portfolio a little bit here. Nothing wrong clearly with the chart and um you know gets it biotech exposure without the specific company risk which is really uh hard for us to justify. You know it's nobody seems to to know much ahead of time for the uh for the biotech individual company. So anyways this is a a good thing and right this is why we have it because it's flat or it's slightly up today and and the market was down 2% at the low. So, um, you know, a nice a nice thing to to counterbalance our portfolio.
Um, and then Roy and I also I'll add, you know, we did something here. I happened to mention, okay, man, I hate I hate it when stocks have these little fake breakouts where they break out to alltime highs and then come wait, you know, come back into the base. Um, it's so it's maddening, right? And a lot of times that that ends up worse. But, you know, Roy and I, we we looked at this and we saw a um, you know, a little bit of a catch-up plate, right? Not a lagard here. It just hit alltime highs. Um, but I think on this day or this day, we were buying it.
Um, and we had, you know, we realized there was a it's kind of a lowrisk play, right? It's right there at the 21day.
You see it finding support as as you're watching it there. Um, and we figured there was a good low-risk uh, opportunity to get involved in Nvidia, which, you know, was not having the same type of explosive move as, you know, AMD and ARM and Intel at the at the time.
So, um, you know, nice little 10% move from there and back into alltime highs today. So, nothing wrong with that. Uh, nothing wrong with that position. you know, it continues to be the bellweather AI stock and um Roy, I'll let you I mean, maybe you wanted to touch on what we were, you know, we were talking a little bit um about like Cisco and and all this and um as a lot of people are right now because some people are still comparing Cisco, they're comparing it to SanDisk perhaps, which has had this monster move, but um you know, in reality, Nvidia is still the the darling. It's still the you know, it's the biggest company in the world. Um, and uh, you know, after this sideways action, there's no reason why this can't continue to power higher to go from 200 to 300, you know, over the the next leg of this bull market.
Yeah, there's Wes and I were were talking and just just really basically looking back at history were all these stocks that we've that we've followed in the past that we've owned many many of these but Cisco with their uh Cisco was the dominant stock I think in the 1990s the number one stock of the decade and it really peaked when the market peaked and you know the question that you have to ask yourself and by by the way it the I think the last uh the last month or so the stock I think Cisco doubled I think it went from 40 to 80 or something like that the last part of the move when the stock was in new high territory you know you know just technically this stock is just Nvidia is just playing catchup right now and it's gone sideways for months but we think with the earnings power and as as everyone knows on the call the earnings power and all the semiconductors they're, you know, they're quite a bullyant because of the shortages that are out there. So, we think that, you know, if you take a look at the monthly on this, Wes.
>> Yeah.
>> You know, if this if this, you know, if we're in the and we don't think that we're in the blowoff stage like the 2000 top in the internet bubble because in the top of the internet bubble in 2000, believe me, I was there all over it. uh we had many stocks that were cascading forward without any types any type of earnings and this is a trillion dollar company that has enormous you know it's got an enormous earnings power so we think that you know you know after the after going sideways for months now we think that Nvidia's go going to embark on its next up up leg and you know you know I I would not be surprised if you know Intel goes from 200 to 400 over the next 12 months. If Nvidia goes from 200 to 400 over the next 12 months, so it's digested, going sideways, just moving out large cap stock with tremendous liquidity that we think that will they'll raise uh they'll meet and raise guidance when they report later on this month. So we think that you know definitely it's a powerhouse and um you know we you know we have high hopes for the stock moving forward you know this year. Mhm.
>> And the last stop that we have is Spear Entertainment, of course, the entertainment uh venue in uh Vegas. And uh you know, this is sort of the action that you really would want to see where the stock made new highs and then the stock pulled back to the 50-day and bounced off the 50-day. So, we've been in we've been in this stock for a month or so, but you know, it did have great action. Came into the 50-day. So, it's really giving you an alternative uh entry point. You're bouncing off the 50-day right here. Earnings are out of the way. Earnings were excellent. And uh this is uh our our the final holding, the final position that we that we currently own.
>> Yep.
>> Um Wes, pull up NASA.
Wes and I are looking, you know, we we got shaken out of Rocket Lab uh last week, which is which is just kind of a uh uh uh Yeah. And and to be fair, we we were shaking out only because we were up like 1% it maybe whatever it was and ahead of the earnings number, right? Other than that, it's we didn't feel like making the gamble, I guess. But >> yeah.
>> Yeah.
>> And you know this stock did follow through. Pull up Rocket Lab if you will.
So this this is what can be so annoying and it and mystifying and you really the way the stock closed the day before the number and we've had a few of these blowups that we've seen in the market and you know it was it was one way or another. We didn't have we didn't feel like we had a large enough cushion to hold it into the earnings report. But it's it's had pristine action since the breakout right here. And uh at the same time, you know, the market was extended, market was coming under pressure. So we uh you know, we took Rocket Lab off along with uh PL as well.
>> Yeah.
>> And we are uh you know, so you know, we are you can see this stock made a new 52- week high yesterday. It had a great inside day today. close. Excellent. And so we are looking at the space and what you know what's really gotten us got us interested in the you know in the space of course in the in the in the space industry is uh the SpaceX IPO that's coming and race is a way of of having your cake and eat it eating it too because they've got 11% of this of the ETF on uh NASA and SpaceX. X and we know that SpaceX is going to be it's going to be uh it's it's it's going to be highly desirable and uh it's going to be a the IPO is going to be the biggest IPO in history and we think there's there's going to be an a big IPO pop and we think that this ETF might benefit and uh so you can see the stock had an inside day today and we're this is one that uh Wes and I are looking at tomorrow to see if it'll break into new high territory.
Uh and it re it sort of reminds us of the Drram uh ETF. You can see that spa the space is this ETF is very very new. West pullup the >> Dam >> and this and so this is the this is a memory ETF that you know that that's moved that that doubled off the the uh opening price so we think that you know there's tremendous demand that there will be tremendous demand in the in NASA as well so uh you know so this is one that's you know the same thing but a new uh you know a new stock.
>> Yeah.
Um >> uh you know is you know we can do we have any questions Wes regarding individual stocks?
>> Not really specific names. No.
So let's then let's just take a look at the hottest space uh the hottest uh sectors that have been certainly want to know about SanDisk and you know some of these stocks. H >> so uh you know this is SanDisk and you know it looked like the top uh you know potentially was in you know yesterday but you know uh it's going to be interesting to see if this stock holds in the 10day. It didn't even hit hit the 10day today but you know a good entry point on a lot of these stocks that are extended might be the 21day.
Yeah, which is which is really it's a significant move down from here. So you have to be very careful that uh you know that you don't get hoodwinkedked and that you don't uh you know buy these uh very extended stocks the first day that they try to pull back. You know what you would really like to see is you would like to see the stock uh first of all go sideways. you know, get have some inside action, build a little base there and, you know, and have like a two to three week uh type pattern, which which would probably give you a much better setup.
But we don't necessarily think that it's over yet because of the fundamental power of this stock. You can see that the stock is expected to earn $63 this year all the way to $170 next year. And this is actually the biggest earnings growth big and the most powerful earnings uh stock that I've seen in 38 years uh being in the business. So you know stocks like this tend to go much higher than you think even though the stock has you know the stock you can see made a 50% move you know in the last month and and certainly this you might say you could you could have said the stock was extended during that whole move up. It just needs to go sideways, but the earnings are uh again powerful, but uh you know, it's still it's not necessarily over, but you've got to be very careful, you know, uh you know, in the purchase. But how how much is the 21day from here, Wes?
22% from here.
So, uh, you know, Wes and I were talking about how this market re reminds me anyway of the 1998, uh, period where we had leading stocks like America Online and Yahoo that were leading the parade. But yet in the summer of 1998, they actually came in about 30% like in just in a week or so.
And so uh and I remember that because I owned a lot of those stocks then. But then those stocks after they corrected about 30% in the course of four to five days, they powered ahead and made multiple moves, multiple hundreds of move percent to move higher. So anything can happen, you know, when you have great stocks that where there's a shortage and you have tremendous earnings power and of course we're all aware of u of what you know what might change the outlook and what would change the outlook with their they would capacity would increase, prices would come down and the stocks would peak before you know the before the earnings peaked and they just need they might just need time to go sideways. So, Sandis by far it's been one of the most powerful stocks in the market and we'll just see what you know, we'll see what happens moving forward.
>> Yeah. And Roy, you know, we remember we just to talk about this one. I I don't remember exactly where we bought it.
maybe um gosh May April maybe April 8th or 9th right on the follow through day or the next day um I believe we owned it and um I guess we sort of got you know we're talking about I think we got shaken out here here for that um and we were talking about okay you know what could we have done I mean it did take out the prior days low but the only thing to consider is is just we I know when we were reflecting on it, how do you handle it as good as possible, you know, selling things incrementally as they go up and up and incrementally there. Um I don't know. It's it's hard to to say, you know, armchair quarterback, but um you know, if you still if you still hold it, certainly, you know, it's probably prudent to to make sure you are paying yourself as long as you you know, you have to be mentally prepared to to have the stock correct.
Um 22%, right? like we were talking about.
Um, you know, make sure you're, you know, be be prepared for that, right?
Try to try to be and when you if and when it does come in that much. Um, you may not realize how bad it's going to feel. Uh, but try to, you know, again, think about what you can what you're going to be able to stomach. Um, on that pullback. I think taking out prior day lows is a really good way to to derisk like it did today obviously.
So selling that open makes a lot of sense. Locking in there's really no lowrisk way to get back involved with it yet.
Um anyways that's that's all. Um just a couple of thoughts right you know how do you squeeze the most possible out of this? Um just something to to consider.
Yeah. And so, uh, what Wes pointed out where we got shaken out of this, we were just again a couple of days early and we were kicking oursel, you know, of course, on Friday and, uh, you know, and sort of really high fi, you know, high-fiving ourselves today because it was really coming under pressure uh, you know, today. But we, you know, we'll see how, you know, we'll see if this market puts in a see if it pauses here, you know, and we'll see what happens and, you know, but we we think it's it's important and prudent to still, you know, follow these leaders uh that were, you know, that were aware.
Pull up uh Lum.
>> So, this is the memory space right here with Western Digital and STX. And luminum is the in the optical space.
And they just announced and this is what this is what really got our attention uh as we got and we show where we got shaken out of this one. Wes right >> there.
We were in, you know, we were, you know, had a nice position in this stock, but the market had come under some pressure, broke the 21day, and it really looked like to us like we were going to follow through to the 50-day or even uh more down from right there if you know, if actually we broke the 50-day. But, you know, we were looking at this uh you we were watching this stock yesterday. it was announced that it was being added to the NASDAQ 100 uh by the end of the week. And you know, it really had you know when you look at these prior peaks that 783 peak see where it closed at the high of the day and then it came in five days significantly and again when it hit that high of 960.
It also came in for a couple of weeks.
And you know, while the news is certainly very very important that they're moving to the NASDAQ 100, we thought that maybe it was actually putting in the same type of pop. So, it's g, you know, this might need a breather as well.
>> Yep. Um, someone asked about arm. Yeah, that's >> Yeah, pull. I'll be right back with >> Okay.
Yeah, Christopher.
Um, well, my thoughts on ARM. Um, you know, personally, that's something I was trading and really all over. And, um, a lot of what I've done and some of my mistakes have been, uh, gosh, get out of here. Is uh, taking things off too early. you know, I I was involved here these personally at least for these uh few days, one, two, three days, and I just took it all off, you know, right here and miss the next uh $40 or whatever, $50.
Um which is fine, you know, similar to that Sandis thing. It's like, you know, I could well, one thing I need to to probably change on my tactics is um selling parts, right? it would be fine to take 10 or 20% off here and then you know another 10 or 20% off of the remainder here another 10 or 20% off here um just to make sure you're you know you are trying to squeeze more out of this um you know the whole deal with these uh CPU companies right apparently there's more and more CPUs that are needed versus GPUs right so um at first it was all about the GPU and now we're it's kind of discovery. Oh man, the inference uh of all these AI models that that's run on CPU. So I think Lisa Sue was talking about that ratio coming down um where where GP the ratio of GPU to CPU was like 8:1 historically and now it's going to be like 2:1 or something. Um so I mean I get it. The fundamental story is there. They've got a good product um you know a data center product there and everything for the CPU market.
Uh, you know, of course, I'm not I wouldn't be I'm not eager to buy it back with the negative reaction to earnings.
Um, that was a that was a very, you know, shocking reaction earnings, too.
The way it I think we gapped up like 10% in ARM that day just to give it fully back. Right? So, it's uglier than what it shows on these daily charts. Um, how much it gave back. Um, you know, it needs more time. There's nothing wrong with it, right? It show leadership.
That's the whole that's the thing. Um, you know, these things that show leadership for the first two weeks of the the rally.
I think you'd be wrong to just ride them off and say, you know, that move is over. Um, I want, you know, the leadership is probably going to stay the the same. Um, it's just a matter of letting them consolidate, you know, different things consolidate, right?
like ARM is much more viable soon probably than Micron or SanDisk um that I've had just one pullback day. So I mean I know it's on my it's on our radar absolutely arm is uh you know same thing right fundamentals great you never know the upsides you know we don't know um the price action though uh just with the negative earnings reaction makes me think I can be a little bit more patient let it consolidate you know let it ride the 21day perhaps a little bit but it's still nonetheless you know the the the thing it the thing is it was a very very early leader and it's um yeah it's something worth holding you know and if you've held it through this pullback uh I don't think you've got a whole lot worse to necessarily go right it looks like it's going to go to 200 um and that 21 day um you know at some point you're going to have to pro protect your profit but I think that you know it looks like it's yeah I you know keeping it simple is it hey it was a leader and you know it was a leader in this in the last month. I I don't think that this necessarily changes that over the next six months, but um yeah, I don't know. I I like I like I do like it quite a bit though as a um fundamental story too.
You did pull up Intel, Wes.
So this is uh I mean this is ana this is really an amazing move uh from the breakout right there and but you can see how extended this is and again it would be completely normal for this stock to pull back you know if we you know if the digestion continues to the 21day and again I was noticing on the ARM chart as well u you know often we use a break of two the low of two days below the 21 day for our final stop. So that's something that we uh you know you have to always be prepared for the stock to go when the stock's in a nice uptrend like this to touch and tag the 21 days.
And many times after a stock breaks out and you can see uh it hasn't touched the 21day the whole time that the stock has been in the uptrend. So it would just be to totally normal for the stock to come back to the 21 day. So that's what you have to prepare yourself for. How far down is the 21day west from here?
>> Oh >> 41 41% 28% after >> Yeah. 288 from here was 41% from yesterday's high.
>> Right.
And uh so that's you know that's why we you know that's why we lightened up and everything because we had this maximum extension uh for you know uh you know above the 50-day in many of these you know many of these stocks and that's why you know we uh we ra you know again we raised cash you know last week.
>> Yep. Here, we'll talk about this one.
This AOI just because it's in that same space as light that we were just talking about.
Um, I don't I you know, it's the same.
It's just it's kind you know, kind of a lower quality, higher beta lit or Sienna or Corning.
And uh I mean the the the range of this thing on a daily basis, look, the average true range is 12.9%.
Um that's very hard to get involved in with a lowrisk play. Um the last lowrisk type of entry was was down here at the 21day, right? And if you were if you did it on the first time and tried it off 21 day, you you know, you likely could have been shaken out roundt tripping it and then missed the next move. It's just a very very difficult thing. Um if you can get it right, it, you know, it has potential to be a monster for you, right? But I find it I'm I'm hesitant to try it because I think I'm not going to be able to hold on. But um you know, it's the same, you know, it's all the same story.
It's all huge, huge, huge growth. These new companies are coming out in the woodwork with, you know, fiber optic cables or storage solutions or whatever it might be or um, you know, different networking things and all that. Uh, it is hard. It's It hit an alltime high today. It went negative. Uh, I just think you've got to try to f I think you've got to try to we're trying to understand like the character of certain stocks, right? We were talking about light having a certain character and how these pullbacks it seems to break the 21 day, right? If you look back the last three or months or so, you know, AOI to get involved, you may want to, you know, studying that the character of it, you got to wonder if it's doing the same thing. For whatever reason, these uh these um fiber optical uh equipment companies have that kind of choppier trend. You know, the the the memory stocks have not had anything like that, right? The memory stocks don't even hit the 10day it seems. And uh these become more difficult, but it's it's it's got a lot of heat. If you are, you know, interested in trading that Roy, what do you what do you have to say? Yeah, you know, the earnings are powerful. That's what, you know, that's why what, you know, why we were involved with it. But you can see how volatile it's been. It's been extremely volatile.
>> Uh, but you know, earnings this year up 497% and earnings are expected to grow from a dollar to 573 next year. So it's you know this is it's certainly one of one of the >> companies that have the most stellar earnings prospects you know in the market today. The question is is it you know you know are those earnings in you know in the are they are they being discounted by the market price right now. So, >> but you you can see from 150 to 200 in three days just extreme volatility on on both sides. You know what what you would like? You'd like to see the stock just calm down, go sideways, build a handle, and then provide another al alternative entry point. That's really what you uh would want to do really. you know, if you're using that 21 day as an exit point, uh you would have to let the stock go all the way down to 145 before, you know, down 20% before you would stop yourself out. So that that's, you know, depending on your position sizing that, you know, that's, you know, that could be uh dicey.
>> Yeah, that's important, Roy. like you mentioned like for this stock because of the 12.9% average true range. Um you know let's you think about the math on that 12.9% if you had like a 3% position um you know you're that's affecting your portfolio by about 04% just that one stock is moving your portfolio 0.4% 4% every single day.
Um, you know, so keep that in mind, right? Like if you, you know, if you double that six, if you have a 6% position, uh, then, you know, it's moving at almost a percent every day, almost 1%.
Uh, just from this one stock with a 6% position.
Um, that's all it's, you know, you definitely, you definitely want to have the appropriate position size, um, to be able to handle it. Um, and I see this Charlie or Char Charlene owns it, for example. You're you're making some comments like you've got you have it in two accounts and you've done you've done great with it. You've got a nice average cost. Um, can I ask how how what percentage of your portfolio is it?
Just so um out of curiosity, Charlene, as you're um mentioning you've gotten the position on um and I'll wait for her to answer, but also um I'll ask about this one as well.
Joseph's asking about Um, Sols.
Oh.
Um, someone at my door. Uh, oh, Sols.
Uh, yeah, this is from Joseph. Okay.
This has absolutely been on my radar for um, yeah, you know, the IPO. Roy and I are always looking for new merchandise.
Um, you know, especially those new merchandise items that come out.
um and you know are at all-time highs, right? So, this is definitely something we need to pay attention to. Very good relative strength, you know, on a day like today. Uh earnings are out of the way, right? Kind of a lackluster response to earnings. Uh but um and volatile, okay, 13 billion, that's probably big enough um for us to get involved in. So, definitely uh definitely something that we need to pay attention to. Um, >> yeah, that's exactly what you want to see after a, you know, after a a dynamic pullback in all these uh technology stocks. Of course, this is a chemical stock, material chemical stock, you know, pristine action, you know, coming out of the, you know, coming out of that base. It's really, you got somewhat a cup and handle formation there, and it's just taking out the handle really right now. He's somewhat flawed in his construction, but nevertheless, it, you know, it is, you know, it's it's showing itself. So, that's it could be very interesting from here moving forward.
>> Yeah. And by the way, Carly Sharp, so he's uh that's who is uh asking about AOI and he's got a he's got a big position there. 15 to 20% is a serious position in AOI and um but you know I'm sure you've you've made some serious uh progress there man that's um that's great you know that to be up as much as you are in that uh and I'm sure some of that is you know 15 to 20% of course it's already it's up 75% or so for you so um that's great um oh and he's selling some some calls calls covered calls to >> okay >> to help with some of that um which is you know something we don't know very we don't know >> you know one you know just one uh one thing to keep in mind I've found over the years that one way that you can manage a position that you're up one way is to protect 75% of your profit and that allows the stock to normally breathe a little bit but yet but gives you uh it gives you a trigger point where you where it allows you to pull the trigger unemotionally in terms of locking in your gains. So I would you know I would calculate that number as well and uh you know when you have a when you have a winner like this you know and it could be again based on the earnings prospects this you know this stock could be much much higher a year from now but you know let's just say the market you know you have to it goes under you know further distribution you've got to be able to ride these stocks all the way down to the 50day and you know if you don't have an exit strategy ahead of time. You know, you're you're you're often often you will panic. Where's the 50-day Wes? How far down is 50 days?
>> Well, yeah, I was just thinking about that. But the good news is it's 45% or that's the bad news. The good news is it's above his average cost still.
>> Um, >> which is, you know, something that >> Oh, yeah. Great. That is >> great. Yeah.
Um >> yeah, we've seen we've seen a couple of these software uh companies like docn and aami they've uh they've exploded upward after their earnings period. So these are stock you know both docn and accommi are in this um agenic ai type of space and data dog is in that it's in that field as well and so these are three stocks that have that are showing tremendous accumulation on the breakout and twillio as well so we're watching these to see how they handle the pullback uh you can see this twillio uh coming back here. We would think it would be completely normal for this stock to come into the 10day and that's where we're going to be making probably an informed decision uh based on, you know, how these stocks handle their pullbacks to either the 10 or 21 days, but this stock recently just broke out. Normally when a stock just breaks out of a big base like this, it can run for, you know, three to six months from that breakout period. And you can see on the weekly, you know, this stock's just broken out of a two-year base. So, um, you know, it's a stock that's been out of favor for years. It was a big stock for us in 2021, and now it's kind of, uh, being reignited again, just like data dog.
as well.
So, these are a couple of stocks to put on your watch list as well.
>> Yeah, >> a few stocks.
>> Let's see. I mean, we we often talk about this be um you know, really the things that consolidate near their highs the best, they're they're definitely near the top of our list.
Um we we ended up buying this for a very brief brief move.
Again, not really, you know, we we struggle to have a whole lot of conviction just owning into the earnings risk because you just never know. Um and we find, you know, we find that we've just made plenty of progress in between earnings moves a lot of times. So, um this one continues to be really high at the top of our list.
um her potential buys um you know certainly it's up there and the numbers are you know incredible too just that's that's obviously a key uh theme here the numbers um they're sold out they are adding capacity um they're really helpful to speedily getting some of these data centers up and running you know the electricity bottleneck is enormous um that's just getting hammered in there and they're probably going to grow capacity to produce their their bloom hydrogen boxes. Um and you know pricing you know also is there and there's just a lot of incentive for for um Amazon and Google and and Microsoft to get these things up because it appears that they can instantaneously uh you know monetize those with their cloud revenue and their cloud customers um at Amazon and and so uh Bloom I know This is definitely near the top of our list. It already, you know, it came in, hit the 10day, it's bounced, it snapped back. Again, this has been, this is a tricky one, a tricky stock. They always are when they have these average true ranges that are, you know, in in that 10% ballpark. That's, you know, that's a tough thing to to own and um but you know, that's how you move the needle as well. So, we are looking at this and this is really um you know ultimately this is really nice action. Would love to see it do this for another week, right? And then take out 300 and go um >> but we will see. You know, Roy and I it's it's very it's Yeah, it's high on our list.
>> Yeah. Speaking of consolidations and getting shaken out, we just we got shaken out of NBIS uh the other day and we we didn't want to carry this stock into the number into the earnings period.
>> Yeah.
>> And we we sold it on that reversal, right?
>> I think this day. Yeah. We ended up selling it day two um where it was, you know, we saw it taken out that low of the prior day and we you know, we sold it around here. um you know and that's when we tried to buy here, got shaken out and then bought it back. I think we actually bought it back on this day even. Um so got a decent move, whatever.
But yeah, I mean the theme has been while yes, we've seen a lot of good earnings reactions, like in the long run, you never really know. It's it's always a coin flip. No clue, right? Uh how things are going to react. Um and you know, we decided to take the profit and just wait. Um, you know, we we were discussing how it was definitely a leader, the leader, right? Um, we had some stock envy on the way up here, right, when it when it um had this monster 70% run in early April.
Um, but yeah, anyways, it does it's it's not helpful for us to just gamble. You know, there's a lot of other options. First of all, core weave not great action, but there are so many um other stocks in the industry that don't have earnings risk, you know, tomorrow morning where I we were just discussing, okay, maybe we can buy one of those. You know, APLD is a a similar size company and and right there at all-time highs and you know, the hut thing definitely that was a big standout today. Same industry.
um top of our list, you know, big big uh I guess announcement here, partnership there um on that day and get action as >> well. Yeah, with >> what's that?
>> I as well.
>> Oh, I as well. Yeah, I had that huge partnership. So, you know, you have you got this mixed bag of reactions, huge Nvidia partnership um announced that day and then they, you know, kind of sold into it and then here you have the pricing of this uh you know, the secondary. So, these are these are tough ones. You know, the growth numbers are insane, but um they then they come out with these of course they come out with secondaries and raising debt and the market has to react to those. So, you know, we were debating do you buy weakness here? We were talking about that a lot yesterday. um in Irene if you just buy the weakness in some of these um but the theme group has uh you know has certainly paused um the last several days and um you know we'll see we'll see how I don't know we'll see how MBIS reacts we we again not a uh not a clue and there's nothing wrong with taking the profit you know ahead of earnings Um, but nothing wrong with it either. I mean, there's certainly nothing wrong with it. You could just derisk, you know, and something we could have done is just taken half off and carried two and a half% in earnings. You know, taking a 2 and a half% position into earnings isn't isn't um, you know, undue risk for us. We, you know, that's an appropriate size um, a lot of times for us.
Oh, >> and again, you know, it's just it it's it's really, you know, how much confidence do you have going into the number? And that confidence many time is uh dependent on your profit cushion.
like we uh we actually took Corning and GLW into the number and were penalized >> and uh you know this stock had a really really nice breakout consolidation and we decided that we were going to hold it into the number and the stock >> uh you know and we sold the stock on the break there with the reaction to the number and then subsequently there's been a deal with Nvidia and uh you know the stock has >> has rallied back. So this is still you this stock still has a really nice profile and we would just like to again like to see the stock come into the 10day go sideways uh you go sideways for you know four five six days four five six seven days and then take out yesterday's high on power on volume as the uh you know as the selloff uh dissipates in these stocks. So, you know, they just need a, you know, they just need a breather, then that's all there's, you know, certainly you this c this certainly has got really nice action over the last week, you know, in the, you know, in this name.
>> Yeah.
Yep. Um, let's see a few more up here. btn eating >> uh just uh you know sort of I mean there's nothing really wrong nothing really wrong with eaten what's what are the earnings power you know it's really you know this stock's been around forever you know you know a nice cyclical industrial company doesn't have the power all these other uh stocks have in that particular industry group But uh you know it could play it could play catch up and it just uh there's you know it hasn't done any really anything wrong here. It is sort of getting sort of choppy that's uh represented by by the group volatility uh currently.
>> Yep. Yep. Yep. Yep. And uh Pterodine um Pterodine is interesting. I I know we you know we owned this too. I think we bought it. Um you know this day this is when it you know easily identified kind of leadership activity here. Um I believe we believe we just bought it that day and um we ended up selling it again ahead of the number. Okay, you know, gave back some profits that we obviously wish we didn't, but um you know, this is the nature of of these earnings days 19%.
Um so we did take some off or take it all off there with a lot of things. Um no doubt this is encouraging action. Um I remember this was upgraded the following day. So that's you know that takes a lot of um courage I guess for a for a sellside analyst you know it does it is quite the statement to say wow the market's really got it wrong uh you know down 19% and then come in and say it's all you know it's a buy and change your rating it is kind of a big a big stand um and it you know it rallied 12% it's um it's really corrected itself and that's exactly I mean that's it's wonderful to see it um get it all back in the course of five days. Uh so it it's back it's certainly back on our list. Um you know I'm not it's that is kind of a that is special action I guess for a gap down in earnings where now it's it's all is forgiven. Um and um just you know that's that's uncommon though, right? Where you get that that that's why it's that's why it's special. It's just it's just uncommon to see the market really get it wrong the you know the initial reaction.
So, um, you know, I it's not bad either where I I do like the idea of having some kind of, you know, low lower risk entry. Um, like like today's low is not bad, right? As as your stop or you know, close to the 50 is not bad. Um, where you know by all by all um accounts this was a leader right initially after the follow through day. Um, this was, you know, gapping up day one like that that action that makes me want that makes me definitely want to pay attention to it. Um, pay attention to it here. You know, this is and this is the kind of action you want in a lot of these stocks where it just goes it calms down, right? That's exactly really what you're looking for.
Just um calming calming down action, right? None of this 12% 20% you know AOI 20% days you know every other day is really really tough to you know get involved in um you know smartly right here. So it's um yeah we're looking for some kind of lower volatility in in these individual names.
Um, >> let's pull pull up a couple of stocks in the uh heavy industry heavy construction industry group like >> Yeah, like Sterling, MTZ, Power.
>> Yeah.
>> Yeah, this is uh Yeah, this is showing remarkable strength as well. But, you know, at first uh at first glance, you might think that, oh, that you know, that's a blowoff top. It's over. But, you know, when a stock goes sideways like this and has a powerful breakout like this, uh, many times, and that's to a that's to an all a green line breakout to all-time highs. And you can see that's it's the stock is put in what we call a short stroke right there. Many times these these have uh these flag patterns are very very powerful indeed, particularly when they come back and make new highs in price. But you know what would what you would expect for something like this is to come in uh you know you could you know you could run a Fibonacci retracement from the low of the breakout day to the high come in about half of that of that measured move and that's that's what we would be watching what we would be watching over you know uh the upcoming days to see where you know where it actually you know where it pulls into where it and where it has support and it's can, you know, it's can typically have support at the 5day EMA or the 10day EMA. So, we're, you know, we're watching this, you know, we're watching the stocks that have had powerful breakouts that we've shown you, you know, earlier. Pull up.
Uh, let's take a look at Power.
>> We've got a couple of days that we're watching.
So really, really strong action after their earnings move. And again, it's not where the stocks have been, but where they're going. This stock is really consolidating quite nicely here. This is really what you want to see. And you know, a few more days like this and a breakout to new high in price would be actionable for us anyway. So, you know, this had this, you know, you've got the earnings risk out of the stock. It's definitely in a leading group and uh it's this you know it's quietly consolidating its gains and f the next one would be MTZ.
MTZ the same type of action after earnings the stock made a move to new highs. So you can see where it's pulled back to the 10day and it certainly looks like the 21day might be support for it.
So this is the kind of action that you that Wes and I would like to see in terms of you know adding some of these stocks back over the next few days depending on how they consolidate.
Um oh talk about this one. is definitely I mean yeah um >> yeah the numbers on this stock we passed on this and you know we we definitely saw this we saw the you know we saw the stock but the numbers are very very small only $10 million in revenues u and so it's you know it's a you know it's a ve a small cap play and we didn't feel like, you know, it had the liquidity that we're, you know, >> it doesn't for us >> for us anyway. And uh so uh and we we had we we had traded this before. It's a testing company, test equipment company, much like Pterodine and uh so it's just too small in terms of market cap. It's got a $3.2 billion dollar market cap and for us and that's after doubling. So, but you know, it only had a billion dollar market cap before, you know, a month ago. So, just too small for us.
>> Yeah.
>> It's getting quite volatile as you might expect from a small cap.
>> Yeah.
>> It's had a big move.
>> What's this? Lewis.
Okay.
They received some huge orders from a couple of hyperscalers. Sorry. the uh that's what Carly is saying about AEHR.
Yeah. I mean, clearly it's like uh you follow price a little bit before the the numbers, right? Um because the consensus can be a little bit behind, but uh yeah. Gosh. I mean, again, so much of what we're going to look at is, okay, let's take, you know, let's figure out how we get how do we get involved when um when it's up this much from here and how, you know, patiently get involved with with a lowrisk play, you know, with a some of these stocks um that have been, you know, this is a lot of volatility again here um after that massive massive massive run. So, um yeah, I mean it's it's nonetheless anything near highs is is important to watch. Definitely.
>> Yeah. Primarily, you know, primarily 90% of our buying or for are stocks that are within 15% of their 52- week high. And you know, uh that so that's where we really primarily concentrate uh you know, most of our buying That's right.
>> Yeah, >> this XR.
>> Yeah, Louis is asking about XR.
Um, gosh, I don't know. I don't have a super strong opinion about this either.
I'm assuming big the biggest holding is probably what Boeing.
Um, but I don't Yeah, I don't have a strong opinion. Um, sure. You know, breaking above the 50 is a fine place to get involved. It's right there, right? It, you know, it is consolidating and and quieting down like exactly what we're saying we like to see for some of these. I just don't know if it has the power um as much to get involved and I don't really want to be involved with the headline as much of the headline driven thing. Uh, I don't know. I don't feel like it's I don't have a strong opinion either way.
Uh >> yeah. Notice Wes, notice how tight it was last year from April through really April through October. That's really the type of move. Look how look how tight it was there.
>> And you know, and you those are the types of chart patterns that are just real real tight and you know, they just they just come back to the 21 day and that's it. And you know, the character has certainly changed for this stock.
And you know, until the stock breaks out to new highs like it did in April of last year, it's you know, it it's you can see the characters. It's very very volatile right now. So, >> uh you the characters change. It's you can see how difficult it might be to trade because of that volatility.
Because of that, you know, I would pass.
Um, but let's see. He had one other Rocket Lab is the largest holding.
That's interesting. Well, yeah, I'd rather go down Rocket Lab. Um, Bill Swanson saying that's the largest holding. This is what I mean. Yeah, I'd rather if I'm going to be involved in anything, it's it's Rocket Lab first, it's PL second, and it's uh Lunar third for that. Um yeah, for that whole uh industry group.
And then like Roy talked about earlier, he talked about NASA, you know, it happens, I guess, have a SpaceX u you know, holding there. And this to me, right, this is again to to make an impact, this is probably a better place to look um than XR as well. So I guess that's my two cents on on the whole group there.
>> Wes, we've got about five more minutes and then we'll call it a night at 9.
>> Okay. And Arkx. Okay. So that he also mentioned this mentioning this space.
Okay. Yeah.
>> I don't know the holdings in there either. But hey, also this to us, this is better. I mean, this is better where it's on the cusp of new highs.
>> Yeah.
>> Um >> I'm sure this is even more diversified though, right? This is That's the thing um about it. I I I don't remember who all is going to be in here, but I'm sure it's companies that you don't think of as like space companies, you know? You might see I I don't know, but you could see like a Caterpillar in there or some I don't know some heavy machine company or you could see a lot of different random you could you could see Nvidia in there, right? Because they're going to start spinning sending data centers to space. So maybe Nvidia, AMD, and Intel are all in this. I don't know. But um it's a better chart, right, with some some uh we >> have the drone companies in there as well.
>> Yeah, probably.
Yeah.
>> Yeah, I bet. So anyways, I still, you know, tend to I tend to look I tend to favor Rocket Lab. It's one of the more frustrating ones because we were all over it. um you know it uh it just it really uh powered ahead on earnings and I was talking to Roy of course about this and you know in my in my humble opinion you know when we were buying it I think we bought it down here um you know breaking above the 50-day uh you know as it was kind of finding support along these moving averages and that's where we originally bought it and Um it's you know it it to me it was $150 stock potentially and now it's at $120. Well it was a double from here.
um you know now we're pay we're playing for 25% so it's a little bit less attractive but um you know either way you just don't argue with the you know you don't argue with it right I want to I want to get involved on the long side still but you know I could understand why it would have some sideways action and come in um I mean I could see why it would come in 10 15%. Um and then you know if you get closer to 100 and then you're playing for 150 there uh that you that becomes a better logical uh buy. Um you know I know some things whatever they had look they had a record quarter great 200 million in revenue up 63%. And so they're, you know, they're doing some things. They partnered with Anthropic.
Uh, very cool, right? They're, you know, strong defense company. There's, I don't know what that's going to bring. Nobody knows what that's going to bring. Um, but Anthropic is a, you know, very important upand cominging defense company.
So, um, any yeah, I I this is my that's the best option. Um, and again, just I mean, personally, I would narrow it down to to these three, PL and Lunar. Um, YSS, it's kind of tiny.
IPO, that's that's fourth on the list, but maybe not um not necessary.
>> Okay, with that, Wes, let's uh let's bid farewell. And again, folks, we want to thank you for uh tuning in with us tonight. Uh we think it's we think it's a very exciting time to be involved in the market and we you know we we think that the setup's going to provide some really nice upside. This is exactly what you want to see when this, you know, we we don't this power trend that we're in.
We don't think it's been long enough.
Anything can happen. We don't think it's been long enough. when we look at other power trends that have taken place before for it to be over right now. So, u you know, we're definitely buyers on weakness. We'd like to see some nice setups, but we're very optimistic moving forward. Uh so, uh uh good luck to you guys and we'll bid you farewell and we'll see you next month.
All right.
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