EMERGENCY WARNING: MAX PAIN For Market Makers Could Exceed $5,000,000,000 In the Money Call Options

Video Closed Caption:

good morning good afternoon good evening

folks Michael Zuber won rental at a time

first and foremost I apologize for the

video quality perhaps the sound is a

little different I honestly did not plan

to do any interviews this week while we

were on vacation but my good friend Mr

Dan bird sent me a note saying I got a

warning for your folks can’t you squeeze

me in and I’m like

if you got a warning for our audience uh

I will make it happen so again video

audio we’re gonna do the best we can

we’re going to get this done in one

video but Dan thank you very much for

adjusting your schedule this morning

yeah no problem I know you’re doing this

earlier because you’re getting ready to

leave so yeah it’s not going to be we’re

just doing one and it will be

abbreviated probably yeah so we’re

basically going to cover what we

normally do in two videos in three first

will be a look back uh let’s take a look

back last week uh we obviously had CPI

Monday which came in uh lower than

expected I think expected was eight

seven came in at eight five you wanted

eight three I’m gonna call that a win

you were right and then more importantly

I think PPI uh came in lower than

expected kind of that validation that

wholesale number so what’d you see in

the market uh you know when you got

confirmation and again I don’t think

you’re calling it because there’s not a

trend yet but a lot of people started

saying Peak inflation

yeah I mean it’s just one data point so

we need the next one which uh which will

be before the next fed meeting correct

and I think that it will continue to go

down

yeah because we’ve been here before

right we we had one month go down and

then it went back we did so yeah yeah we

had one month that went to 8.3 and then

next month it went to 8.6 yeah so yeah

instead of continuing down yeah I think

it was eight five eight three and then

we went to eight six yes eight five

eight three eight six correct and then

the nine one and now we’re back to eight

five

so basically same place we were four

months ago yeah the interesting thing on

this number and I think we talked about

it last week I know I talked about it on

Monday with Taylor is I I said headlines

coming down and I actually said eight

three as well as you uh so we were both

off a little bit but I actually thought

core would go up and core was obviously

flat uh yeah core

I just I don’t see the I don’t see the

things inside to make core come down

right we’ve got gas obviously 60 some

odd days in a row food coming down with

the Commodities and probably again I

think headline comes down lower next

month

but that core number man that core

number could be sticky and it might go

up next month because of rent so what

what do you think of headline comes in

and and core is I think I think Cora is

going to be flat for a while actually

yeah I’m not sure it’s going to go up a

lot I’m not sure it’s going to go down a

lot either I think headline will

continue to slowly go down

it’s not going to drop as quickly as

folks would like yeah I thought it was

interesting that the Biden

Administration

Victory lap saying that inflation was

Zero I thought that was very creative

inflation is zero yeah like they don’t

think that Americans know what the real

story is why I mean there are some times

when you can actually say a statistic

but then you got to remember that most

people are going to go to the store and

go not zero where I am it’s it’s uh yeah

that was that’s right that might have

been an accurate statement

but probably not a wise statement that’s

an accurate statement with a qualifier

oh of course that’s what I I’m not I

believe me I’m not defending him I’m

just like yeah the Victory lap was

probably not not a wise move right

it’s like it’s like calling uh the

spending Bill

inflation reduction induction act like

they don’t think Americans are

stupid they think they think we’re

stupid out here yeah well uh yes Dan

they think we’re stupid yes you might

believe that

inflation is caused by spending agreed

yeah inflation has always been I think

this is Milton Friedman has always and

always will be a monetary phenomenon

right that’s right and the FED can only

affect the demand side it can’t affect

the supply side correct if if the

Congress wants to continue you know

exacerbating the supply side and by

Supply I mean money yeah yeah they keep

creating money to pay for all these

programs yep the FED can’t affect that

nope so no matter how how much the FED

raises the rates it’s not going to

affect inflation if uh Congress keeps

spending I agree so what did you see in

the stock market last week because again

you got what you wanted you and I talked

last week I remember asking you

explicitly what happens if it comes down

you said the market would pop you also I

don’t think got your validation of head

and shoulders I don’t think that

happened if I remember no that was

negated actually

um oh wow look at that’s that’s yeah let

me show my newsletter real quick oh yes

please sorry anybody that wants to

participate it’s funny I I got uh I

think I got eight messages yesterday

after you sent it out saying Michael

this might be one of Dan’s best

newsletters you know somebody sent me

that too yeah so um yeah I’m not sure

why because I just did the same thing I

always do but your newsletters are

always good and they’re free and they’re

free yeah right

um I’m think I’m toying with the idea I

don’t know how the formatting comes

through on your side one person said the

formatting it doesn’t look right on

their screen

and they have to scroll right and left

to read it oh no it came’s fine but

they’re the only ones that said that so

I’m toying with the idea of creating it

as a PDF file instead of an email

yeah yeah I might try it once and see

what people think anyway

um the newsletter like you said is free

I sent it out every Saturday as I’m

doing my own research if you want to get

included at the send me an email at

breakpoint trading at gmail.com

and I’ll add you to the list and if you

want to stop getting it just let me know

no big deal I put little cartoons in so

this one in the upper left I thought was

great yeah it’s a tweet from Elon Musk

when the country that revolted over

taxes I saw that that’s a new IRS agents

is he implying we need another Revolt I

didn’t be no comment the one and the one

on the right up here I actually put in

for a friend of mine

is not on your on your uh

a group of people but um he’s beating

expectations he’s back years and years

yeah he’s been a big proponent of novax

ah okay and two up to two weeks ago

the

CEO has been telling everyone that

they’re going to report a billion

dollars in revenue and he’s been

pounding the table no way you gotta buy

this you got to buy this and I didn’t

because I didn’t really like the chart

yeah well they reported last week and

they missed 40 yeah that’s not good not

a billion 600 million

they missed by 40 they they only got 60

of what they were promising

so that’s why I put this in here a

little of x

logos we’re beating expectations and

here’s expectations yep yep I like that

that’s very creative

um

talk about this right now this emotional

Market cycle this actually comes from

VectorVest

and this kind of tells you you know

where the cycle is

it’s right now it’s the it this week a

reported 1.66 yeah that’s crazy and you

can see 1.6 is the high so this is one

of the warnings that I mentioned

that it’s it’s way overbought way way

overbought and then I I put this in here

which comes from stock Traders Almanac

which they do a ton of research on

historical information so this is the

last 21 years what the market has done

in August

and it’s you know all of the market

segments Russell NASDAQ s p Etc which

you can see typically in August it runs

up

right until the middle of the week

unlock this expiration week yeah absent

this is my second warning options

expiration is next Friday and as I said

in my newsletter although I left one

piece out there there’s right now

there’s 1.9 billion dollars in open call

options interest so let me just kind of

repeat that for the people listening to

that that heard the numbers but don’t

get it basically that’s a bunch of

retail investors who were I don’t know

buying the dip or thinking the fed’s

going to cut or whatever they thought

they thought the market would go up for

whatever reason they’ve been proven

right they now have a positive bet of

1.9 billion dollars that the market

makers are on the hurt for

yeah and it’s not just retail it’s it’s

uh interesting investment houses anybody

anybody that’s buying options okay so

everybody basically everybody and their

brother is buying the dip the dip was in

June hit the bottom so everybody now is

convinced the market is headed to the

Moon

so they’re buying call options

and those call options expire on Friday

and market makers have to make the other

side of a market right so the way it

works and um Tom bowley does a session

he’s going to do it next week which I’m

going to tune into there’s a session

every month before options called Max

Payne what’s the maximum pain what’s the

point is the maximum pain for market

makers

in other words he takes all the call

interests and all of the put interests

and takes the difference between those

and it gives them the price at which the

maximum pain is

now up until this week the last few

times when I put it in the newsletter

last few times the market had been going

down dramatically

So Max Payne was on the upside

which means everybody was buying puts

right and so it options after expiration

in order for the market makers to not

have to pay out

on all those puts if they run the market

up

and those puts expire worthless right

market makers do not have to pay

billions of dollars to cover this they

just collect their fees for the options

we’ll just collect the fees right

and they’re taking the other side of the

market as well well as the market was

going down number one they want those to

expire work with those puts to expire

worthless right right you don’t have to

pay on them but number two they’re

taking the other side as well so they’re

buying stocks as everyone else is

selling stocks

so that that continues into the next

week after options exploration so in

March and in May the market was tanking

big time and that’s when we had our big

run-ups people were calling uh bear

Market rallies right

has a big run up and then it dropped and

went all the way down in fact it went

even further down and in May it went

further down again and the same thing

happened options expiration it ran up

because of Max Payne so market makers

didn’t have to pay out those puts people

were still buying puts

so the market went up

and all those puts expire worthless and

market makers were buying stocks for

about a week or so and then the market

tanked again and went to its low in June

okay this time we have a complete it’s

going to be the same thing but it’s

complete opposite situation okay now the

Market’s been going up instead of buying

puts everybody’s buying calls

right so Max Payne now is on the

downside

so so it’s to the market makers benefit

to run the market down next week so that

all of those call options expire

worthless and just so I I think I

remember this they they expire on Friday

close a business right

uh yes that’s right the end of the day

on Friday got it

um so you know that’s why in this

this is very interesting here from stock

Traders Almanac and this is next week in

between these two vertical lines right

and here’s Wednesday so the market runs

up and then runs all the way down

be it actually goes down

almost to where it was a month ago so

that could be a big sell-off and a lot

of times it continues into the next week

although I think it’s the good news is I

think that’s going to be it I think

after that we’re going to probably be

heading higher

yeah we get we get a couple of

interesting economic news I think I

think options obviously are going to pay

a disproportionate

uh given what you’ve just shared with us

right because again it’s 1.9 billion on

the Spy right that’s not NASDAQ that’s

not anything that’s right and I forgot

to put that in my newsletter that’s 1.9

billion open call interests only on the

Spy so that’s just the s p and NASDAQ is

bigger right if you’re going to do it on

the NASDAQ or the case bigger but that

that’s where everybody’s been buying

calls so it could be it could be 5

billion it could be it could be a total

of five point just on those two yeah

yeah so I think that’s going to be I

think you’re right I think that’s going

to be something to watch for

um

they’re all there are two interesting

economic reports one is retail sales I

think it’s Wednesday right uh and then

the other one is existing home sales

right how busy or slow uh next week and

again I think I think both of these

reports are going to be the classic good

news is bad news or bad news is good

news right so if we get a bad retail

sales meaning it’s negative or we get

bad existing home sales meaning it’s

worse than expected I think that is seen

as good news meaning the FED doesn’t

have to tighten right but if retail

sales comes in higher and existing home

sales for whatever reason surprises it’s

good news but again it’s bad news for

the FED is that fair the FED can tighten

knowing the economy can take it exactly

so I think those two reports I think

they’re interesting I think the

interesting one to watch on retail is

the inventory levels yeah but we get a

bunch of reports right we get Home Depot

Lowe’s Walmart Target all next week yeah

this is uh the image that I put in the

newsletter that that shows what I was

just explaining what happened in March

as the market was tanking

here’s options expiration this line

right here you can see just before

options expiration the market starts

going up they forced it up yeah so all

these open puts end up you know expiring

worthless and then the market continued

and then the market dropped went below

the previous low kept on going down

interesting here’s offense expiration in

May

same thing happened

so now we have the reverse Trend the

markers generally but now you know it’s

all calls you know everybody’s been

buying calls right into options

exploration so from the market Maker’s

perspective it’s their benefit by

billions of dollars yeah benefit to run

the market down well do me a favor you I

think you had it in your newsletter so I

think you could find it do you have uh

Bailey’s uh event it’s a free event I

think you said yes it is I do let’s see

if it shows up it didn’t show up here

but I do have it that’s in the

newsletter so yeah well it’s in the

newsletter but it doesn’t didn’t really

show up for some reason there was a link

though I remember there’s a link you can

just yes put your cursor over this and

click the look there you go yeah he’s

he’s going to do this on the 27th

um he did this back in January when the

market was at all-time highs and he said

the market is going down he explained

why which I’ve explained on this channel

many times yep same thing that he said

he said it’s going to go down for six

months and after six months it’s going

to start going back up and that will be

the end of the bear Market

and he had the valley bottom I think it

was on your chart he still he still

looks pretty good June 16. that wasn’t

that was in early January January 4th or

7th or something so he’s doing kind of

doing the same thing on August 27th to

talk about the rest of the year where he

thinks the Market’s headed for the rest

of the year yeah if you’re watching my

uh Channel folks you know and you have

the time on Saturday you might want to

tune into this

um again go back and watch Dan’s

playlist we we talked about Bali a month

ago or so talking about the valley

bottom it was really good right so a

couple more things real quick this is um

this shows you a negative Divergence I’m

always looking for divergences on charts

yeah this is this is a 65-minute chart

I showed this last week but we didn’t

have this extra right

um uptrend right here so now the

Market’s actually hit another high you

can see the Gap up when the CPI number

came out yeah right there yeah Market

kept on going hit a new high but the the

momentum indicators continuing

down so while the Market’s hitting

higher highs momentum is slowing

interesting okay another another

cautionary issue for next week

um this is the NASDAQ it’s even more

pronounced on the NASDAQ yeah I see it

right

um this is a chart that I showed before

that includes the 10-year Treasury

10-year treasury has started to creep

back up

still below three

although the vix is continuing to go

down now by the way if the vix gets

below 17

that’s the area that is normally a top

as well interesting okay everybody’s

bullish every everyone’s bullish that’s

complacency this is the dollar

I said last week watch this if it gets

below the 21 Day moving average yeah

then I think you have a shot next week

again I think we have bad news is good

news good news is bad news I think if

retail sales come in light home sales

come in light this this could happen I

mean it’s going to be more evidence that

the FED can back off yeah if we get a

weakening dollar we get a 10-year that

stays below three and we get another uh

good inflation report Mark is just going

to take oh it’s going to take off at the

end of the year this is the vix

fix has just steadily been going down

you can see here’s 20 and that’s below

20 right now if it gets down in this

area down here that’s usually where you

can see over here in January of 22.

right here it has to be low it was below

17 and a half over here yep that’s when

the market started going down gotcha so

fixes opposite the amount of the market

when it goes down the market goes up

when it goes up the market goes down

yeah okay so there’s January if it gets

back down to this level here this is in

uh

April well we had the we had the rally

in March that I showed you the market

makers

um engineered yeah and then after that

rally we started going down again okay

now if we get down below this line which

we already are below this line but

anything down here in this area is about

the time when uh Market goes down and

then this is I put this on LinkedIn I

didn’t put in the newsletter but

this shows the market is these red and

green this is actually the NASDAQ these

are the two recessions

you can see in in green right here

and in red so this is the rate height

this is the Fed rate hikes when they

begin this is when they begin the market

was going down you can barely see it

down here but it went down 26 right here

oh wow all right so when the market when

the rate hikes start for about four to

six months the market goes down

here’s uh before kova this was actually

almost two years before

um when when the FED started raising

rates the rate hikes begin the market

actually went down in this case 25

percent

yeah right for six months and then the

market went up so basically yeah so this

is kind of like hey the market you know

adjust adjusts takes time to unwind

reposition exactly and then they just

you know it’s not

it’s not the next fed increase it’s the

start and then they get used to it they

the FED tells them what’s coming they

they plan for it okay until until the

FED goes too far correct you can see

they went too far in 2018 right here in

the market taper taper tantrum right

right now this this is the red the rate

hike started here we’re just about six

months in but we’ve already had our

correction in this case 35 on the NASDAQ

right now we’re starting to head back up

just like we did both these times okay

and then up here is um the recession so

two two points a recession doesn’t start

until after

unemployment rate that’s this red line

the unemployment rate stops going down

and starts going up that’s when

inflation that’s when recession hits so

over here I hit the low right here

started back up and then recession got

it over here it hit the lows down here

started back up went back and hit the

low but started up right there and then

recession happened right now we just had

a new low

we’re not going into we’re not in any

recession or going into one yet we

haven’t started going back up on the

unemployment rate yet yeah the same

thing with the FED

um rate hikes recessions don’t happen

when the FED is raising rates you can

see all the way through here you can see

how high the rates went back here fed

kept raising all the way to here we

didn’t have a recession until the feds

started lowering rates interesting and

then this one here fed cap raising kept

raising kept raising no recession

that started lowering then we had a

recession got it so both of those things

will show you when a recession is coming

and neither one of those is indicating a

recession yet sure doesn’t mean it won’t

happen right it easily Could Happen of

course

um which which is just like you know

like I said with with the uh Head and

Shoulders here’s the left shoulder

here’s the head right shoulder I was

looking for down here yep it never

happened yeah it never happened yeah

that’s the neckline we started to roll

over but then the CPI number came out we

blew right through it yeah where does so

what are we at and I didn’t even check

because I’ve been away from my computer

for we’re at uh 4219 wow we’re at 42 80.

wow almost 43 wow almost 43 43 is Major

resistance this is another part of the

warning that I mentioned and what was

the peak of the year like 5 000 or

something the year was 48.16. uh so call

it 48 wow okay right so with the head

and shoulders the target was right

around here a little under 47. with this

move here the the target is still right

around 45.50 okay close to up here yeah

so when I when I just try to marry all

of our conversations to go you basically

expect the next five or six weeks to be

to kind of give validation that the

economy is slowing down but the you know

basic basically when we get to September

your current call is 25 or nothing from

the FED yeah

that’s right yeah so I’m going to take

the 50 or 75 but again I think you’ve

been right I think I think the last

several weeks you’ve been on it I’ve

been wrong uh this is why I love these

conversations again as you’ve told me

many times the stock market is not the

economy the economy is not the stock

market so I appreciate your wisdom and

thoughts uh any other kind of closing

comments yeah we’ve got about 10 minutes

I think you gave me 30. okay so um let’s

go with my show but um

yeah I mean all I’m doing is is looking

at what the charts are telling me based

on my experience these things over 20

years yeah it doesn’t mean it’s always

going to happen

um it I’m not making predictions nope

it’s a risk management yes how do you

manage your risk yeah I think I think we

need to hit that more often that’s

really what you know when you when I

reached out to you and we started your

playlist it was like Hey help help me

understand risk management because

before I was a gambling idiot with

stocks right

um so yeah all of this we’re doing here

is about your personal risk management

so I appreciate you yeah so so what this

means for me as a Trader is I got out

of almost everything on Friday oh you

went flat okay not completely flat but

almost flat but the things you kept are

investments not trades

well they could be trades

all right they’re just still looking

pretty good but but some of the growth

ones like uh some of the the chip stocks

that I was in that I made quite a bit of

money on this runoff

because of the three things that I’ve

mentioned already the 1.66 on VectorVest

the um after his expiration yeah coming

Friday and this 4300 level right here

I my risk management tells me

don’t

don’t play with fire yeah the uh the

upside’s not working it could be wrong

this could blow right through 4 300 and

keep on going absolutely could

absolutely and then I’ll get back into

those stocks and I have no problem

selling at a certain price and if it

goes higher buying back at a higher

price yeah if the yeah the momentum is

the right way I like it but right now

risk management tells me be careful okay

now the next next week and the week

after you know going up to the first of

September

could be a struggle for the markets now

a couple things I want to show

[Music]

um

just kind of my process sometimes

in uh Investors Business Daily they

always mention

um some stocks are they’re getting close

to buy levels so I want to look at

there’s five of them this week very

quickly look at them and the reason that

these are getting it close to buy levels

is something called a cup and handle

which is another technology technical

analysts pattern to look for

a cup and handle basically is

stock makes a high it retraces to a low

it climbs back up the right hand side so

it forms a cup

it gets too close to or a little higher

than this previous high and then it

starts selling off and that that makes

sense because these people over here

that bought in when it started going

down they just want to get back to break

even right

so they start selling when it gets back

up to the to that same level

it forms a cup and this is the point

where once it breaks out of the cup that

is the Buy Signal that is very often a

really good Buy Signal on a strong stock

so this is one of the ones that they

mentioned was ON Semiconductor and it

actually not only and this this little

blue area is what IBD they actually show

you the chart they show you where your

buy point is and they’ll show you where

your sell point is and they show you

where your loss is

so where to put your stop right so

that’s kind of nice

not only did it break out of the cup and

handle but it broke right at or above

this high that went all the way back

here to beginning of the year

hmm so this is making new highs

another one was Builder Builder

Warehouse

Builder’s First Choice

same thing you can kind of see the cup

the handle this hasn’t quite broken out

yet

but that’s coming up on it

um eqnr

so this one again here’s here’s the cup

here’s the high right here 39.15.

hasn’t quite broken out yet but what’s

it once it gets above 39.15 that’s the

buy Point by the way this essentially is

a Darvis box if you remember a way that

I do yeah talk about Nicholas Darvis in

the 50s he was a ballroom dancer and he

started noticing as he was traveling the

world he started noticing good stocks

would form a box they’d trade up and

down inside of a box

and once it broke out of the top of the

box that’s when he would buy

this basically is a great example of a

Darvis box

so in his case when he gets to this blue

area up here above 3915 that’s where he

would buy it

all right KBR

here’s KBR same thing

cup and handle the high over here is

56.94 but the the buy area is that as it

breaks out of this handle

it’s a 53.50 if it gets to there that’s

the buy point

and then the last one

is

what is that did I do them all

two three four oh Costco

Costco here’s Costco

little handle right here oh wow

um so in this one you can actually see

where where they recommend taking the

profit which is up here okay here’s

here’s your stop loss here’s your buy

area which is about 552 553

and then run up here to about 650 or so

700 take profit

so that’s five that were in IBD this

week

um just to give folks a sense for kind

of the process that I go through hey do

me a favor I’m going to throw I’m gonna

we have we talked about it earlier four

retailers report next week okay you want

to look at those four and see how they

look sure you can use whatever chart you

want this one or something else Home

Depot sure

oh by the way the other thing um like on

Costco that I really like about the IBD

site it shows you what the previous

earnings were oh there you go shows you

the trends down here

which is nice so Home Depot

it’s uh still working on the right hand

side it’s got the 200-day moving average

above it okay which could be resistance

it’s um it’s got down trending earnings

that’s not good not good earnings is in

two days yeah yeah I think they’re I

think them in Walmart are first so eight

uh Home Depot then Lowe’s

let’s compare those two

Lowe’s is getting closer to its 200 so

there’s a resistance right there the 200

and then their earnings they actually

they had zero and then nine so they had

a little better earnings but a little

worse Revenue all right then Walmart

didn’t Walmart already report oh it’s

Tuesday or yeah you’re right Tuesday

uh yeah they’ve revised twice but

they’ve been reported oh that’s right so

here you go Walmart

yeah and they’ve warned about this

quarter I think I think they will

probably beat their no of course

Walmart’s

Walmart’s no joke they lowered the bar

so they can get over it they didn’t

lower the bar like who did that they

lowered the bar and then came under it

that was not a good idea yeah

yeah and then the last one is uh Target

sorry

Target uh 200 days up here it’s above a

southern moving averages

  1. oh that does not look good so

Walmart and Target

I I’m questionable on those Home Depot

and Lowe’s might meet estimates

but they’ve got some overhead resistance

yeah there’s a lot of stuff going on all

right and then uh stem the one that I

showed last week oh yeah stem

yeah they did the stock of the week I

think it was yeah stock of the week last

week I don’t I don’t really have a stock

of the week this week but yeah other

than those ones I went through

um you can see it went up and now it’s

going sideways I actually got in at

14.75 on one third of my position right

and then I’m gonna see what happens but

it’s it’s actually good that it’s moving

sideways

because you see how you see how it ran

up right here they had earnings right

here and took off

but I got way above its moving averages

so when a stock moves sideways that’s

actually a very healthy good sign

because it allows the moving averages to

catch up right okay

so I’m gonna watch that one

um if we if the market struggles this

one could come in

when would you buy your third your

second third

if it starts coming in I’m at 14.75

right now I mean if it gets down you

know to the 21 day which is what I’m

sorry I can’t

um let’s see does this tell me I’m not

sure if this actually tells me

but let me go back we can guest a bit oh

maybe not well I can show you yeah

all right so the 21 day is at 11.95 so

if it gets that back down here and and

the 200 day is at 12.62. okay if it gets

down to 13 1250 to 13. okay I’ll buy

another third I would buy another third

there and then see if it starts going

back up or if it continues down and then

if it starts going back up I’ll buy I’ll

buy my last third when it gets back up

to my original buy Point 1450 or so okay

if it doesn’t come down it starts to

take off then probably somewhere around

16 I’ll buy another third see that’s

that’s you know this is this is what

this is what you’re trying to teach me

right you letter in your position you

have your points you have your stops you

have all that stuff uh yeah make it make

the stock prove itself

yeah exactly I like that thank you

um so one last thing we got one minute

uh one person sent me a note saying you

know can you talk about your your daily

process okay what do you do typically I

mean there’s a lot of things that I do

and I look at a lot of charts and some

of the relative strength charts I put in

the newsletter now they’re at the end of

the newsletter people can bookmark those

and look at them anytime they want one

thing I do is I start at the high level

what’s the market doing number one it’s

going up

well when you say Market just so we’re

clear that’s the Dow NASDAQ yeah yeah

down NASDAQ s p right okay what are they

doing they’ve been going up since June

middle of June okay so then I want to go

to the next level down is what sectors

are performing so as we should expect

it’s consumer discretionary and

Technology

but this is a one month view but I’ve

noticed that Industrials are making a

big run

Industrials are starting to come back

and actually you know moving up faster

than these two oh interesting okay I’m

wondering what’s happening in

Industrials what’s an industrial company

for example no Industrials um here’s oh

okay yeah I got it Machinery

Transportation heavy construction got it

Marine Transportation commercial

vehicles things like that okay so I I

clicked on on that I clicked on the

Industrials this gives me all of the

industries

so I can start with the ones that

perform the best over the last month

and one that I noticed is heavy

construction right here right

so if I click on heavy construction it

shows me the stocks in that industry

is is deer in this by chance

um

I think deer is in a different one the

reason I asked is because Dr reports

Friday I’m just curious no big deal

um so these these are all here’s KBR

which was on that uh Investors Business

Daily list yep so I can actually click

on that and look at the chart okay so

now I can see now you can see the cup

and handle just like I showed before

so the

buy point is when it gets Above This

high right here the left side of the or

the right side of the cup yep when it

breaks out of that these are these are

Investors Business Daily Rules by the

way yeah that um

that uh that they put put out there so

it says when it when it closes above

the cup that’s the buy point so

somewhere around 54.

would be the buy point

I gotta see the accumulation

distribution looks really good the

Industry Group looks good they’ve been

underperforming their Industry Group

so

it’s out of curiosity here’s deer

deers had a really nice run it’s above

its 200-day oh wow look at that um it’s

outperforming its Industry Group

Industry Group looks good cool

so deer actually might might do well I’m

a little concerned about the overbought

situation with the RSI up here yeah it’s

up there so yeah this this is one this

is one to watch and see if they have

they have good earnings but they sell

off which could happen if the Market’s

struggling right if they do sell off

then it’s a good opportunity to buy

lower down here because they probably

will continue up got it in general it’s

a good thing to watch for if you if you

identify a company that looks strong and

the jar looks strong and they have good

accumulation distribution and then For

What and they have good earnings and

then they sell off for whatever reason

which which often happens yeah the

market could just be upset one day yeah

yeah they’d buy on the rumor and sell on

the news right so those are those are

good ones to watch if it’s if everything

else looks good and after earnings they

sell off then that’s a good opportunity

to buy it yeah

very cool

all right and uh my newsletter if

anyone’s interested if you are listening

on the podcast again it is

breakpointtrading gmail.com uh Dan thank

you very much for reaching out I’m glad

you brought us this warning uh I’m glad

this uh yeah and the warning may not

happen of course not anything else I

mean I showed three reasons why it might

yeah but it but it might not but just

something to keep in mind and be careful

hey I’m I’m just learning I don’t I

don’t have any skin in the game I’m just

gonna watch and uh we will be back at it

next Sunday okay sounds good have a good

vacation all right buddy thanks again

take care

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