Tim Knight Covered His Tech Short and Kept Everything Else

I have a deliberately shorter list of symbols today because I want to spend a little more time on them for my own positioning. Just to get it out there, I am aggressively short right now. That could blow up in my face. It could. We'll see. Um, it isn't it is not based upon the supposition that this is what's going to happen with the results. I mean, we all know the polls. We all know vaguely where things are supposed to wind up, but it's not based on that. Is based only on the charts. If there were no election tomorrow, I would still be positioned in this fashion because of what the charts look like. It's as simple as that. So, um, uh, we shall certainly see. Let's jump into the charts and talk about them. We start with the spider. And I would say shortterm, I've got a couple of targets in mind for this. Um, target one is a very modest target. It's right there. Not not far away at all. Um and that's based on the idea and this is my alternate um preference here. I don't think this is the case. It's based on the the idea that this line here, this horizontal is the neckline for head and shoulders top. So if this are is if this is a neckline, the measured move is right down there. What I feel more strongly is that the actual topping pattern is anchored to this line here. And if that's the case and if measured moves actually work, the target is down here. I think there's a video I did last week that said like the target is 736. Well, that's kind of where it's at. Um, it also works nicely because, um, if it did fall to 736 or so, that would just about perfectly tag this midline of a channel that goes back for decades. So, I just want to emphasize, yeah, Tim the perma bear, Tim the doom and gloomer, the kind of drop I'm talking about here is like this big, honestly. Uh, it is not a big not a big move at all, but it would it would suit me just fine. Uh so that's the measured move on that. Uh just to get ahead of ourselves, if we do break 736, well, we're in a whole new ball game at that point because that exceeds the measured move and that breaks u the channel. So uh simple as that. Uh so anyway, I I have uh one position based upon this setup, which is some spy puts. I changed those uh until this morning. I had November 756 strike uh puts November 20 expiration and I decided to push that out a month. Uh it was a profitable trade. I got rid of half of it yesterday when things were much weaker. But to my eyes, it's like I don't want the premium to go poof instantly tomorrow morning uh on those. it will go poof to some degree on the December that I have now, but a smaller poof. So, I also got them deeper in the money. So, I'm trying to um still participate in what I think will be a drop in the S&P uh without the uh to my eyes much too short time horizon. I'm not a person who likes options expiring like within days, you know, in this case 17 days. I'd rather them out like, you know, 45 days at least. So, that's the spider trade for me. And if we go exploding higher tomorrow because Chris was mentioning I'd forgotten about it but back in 2016 where to everyone's shock uh Trump looked like he might win the initial reaction was a just a plunge in the market and then within minutes a wait a second he'll deregulate everything and then just went rallying like crazy. um those who are just trading normal, you know, retail hours sort of helpless in that regard because, [clears throat] you know, they had to wait until the very next day, which was like ages away at that point, and the market exploded higher. So, it could happen tomorrow. I've said it again and again and again. We could have the blue tidal wave everybody's talking about and the market go flying high tomorrow, which would make no sense at all, but markets love to surprise people. Um, so I will be watching with great interest as will a bunch of my friends tonight here. Um, the diamonds are down and they've been down even when the market was much stronger today and the market's still strong. You know, the ES, the ENQ, the RTI, all green, the diamonds down about half a percent. Uh, so I'm short a big bunch of the diamonds. Um, and so I'm going to stick with that trade. um prospectively if it ever breaks and I by ever I mean within days or weeks this green dash line here that'll be a very nice setup for a big big head and shoulders top. Um we are you know a thousand points away from that or so on the Dow. Um so let's not get carried away but uh good for the diamonds to be down on a day like this. Uh, tech is strong. Um, strong in as much as it's undoing some of the damage from yesterday. So, XLK is up about 1.2%. As you can see, it's not exactly a game changer. It's just a little bitty motion compared to the the wipe out yesterday. Um, and one thing that's given me some pause is that um there's plenty of room for bounce here. So, I was short the cubes when I went in this morning. I covered that. I I'm not, you know, I'm I'm aggressively short now, but it's it's not just uh it's less tech than it used to be. Um there's gold, there's bonds. Uh it's it's not just a straight up short everything tech. Far from it. I've really toned down the tech bearishness at this moment because we've fallen so much. Um speaking of here's the semiconductors, SMH. I'm still short this. Uh we have uh the peak only five trading days ago right here. Uh this was the tippity top of that uh push. It pushed a little against that trend line and fell really fell really really fell and the today's just kind of hanging out. Uh we're up some now. We definitely have sold off the strength from earlier today. Um and as I say, I am remaining short the semiconductors because um I think that there are some charts there's lots and lots of potential room to the downside. Um the reaction this evening until probably several hours until tomorrow's trading days almost doesn't matter. Um I don't think it's going to set the tone for, you know, for the rest of the year. Nothing like that. I'm trying to take this one chart at a time and there are some charts like this one where I could easily see it falling way more than has fallen so far. Um, now I uh yesterday I was talking about earnings coming out. We had Apple, we had Palunteer, we had Shopify and I mentioned the only one of those I had a position on was Shopify. Shopify was down about 17% early today and uh at the early early today I got out quick because I did not like the pattern. So just to emphasize on that um I talked about how some patterns have lots of potential for downside. This was not one of them. This was just kind of a lucky break. Um so it fell really hard and I got out and it started to rally. But, you know, as it was rallying, even though I had no position anymore, I had taken my profits. Uh, this gap caught my eye. It's like, all right, you know what? I'm gonna go in again. So, I reshorted it. Uh, which is profitable now because I got a good price with a stop just above that price gap. Plus, obviously, the earnings risk is gone because they're done for the next 3 months. So, um, anyway, I was short, covered, good profit, got back in again. It's profitable right now. The gap is the stop. Uh, as far as Apple goes, yesterday I mentioned even if Apple fell a nickel, I would be amazed. It fell many nickels. Um, it was uh very surprising to me that Apple was weak like this. What was even more surprising is that we were green this morning uh on on tech stocks in general. Um, you would think the biggest company in the world and the um, you know, the company [clears throat] that's replaced treasury bonds as the most reliable place anybody should put their cash actually fell. Um, but in spite of that, the rest of the market didn't seem to care that much. But I was very, very shocked to see Apple do anything except go to a lifetime high again. Um, emerging markets, EM barely changed. Um, these two were sold off pretty hard, I guess, because South Korea was uh sold off so hard. And that was another baffling to me. There was a lot of confusion in my head this morning because last night when I went 99, uh, the Cosby, the South Korean index was getting zapped. It was down like 3.6%. And I mentioned yesterday I reshorted KOU, the triple bullish South Korean ETF. So, it's like, well, that's nice. It's like absolutely a 10% gain tomorrow. and maybe even more. Who knows how red it'll be by the morning. I wake up, it's up, you know, not the cost. And that's the extra weird thing because I'm like, how did this how did the South Korean market reverse like that? I looked, I was like, no, it's down 3.6%. It had a bad day. But for whatever reason, EWI went up and obviously KU went really up. So, I covered uh Kru and it's just like I don't understand. I just don't understand uh since it's anchored to that why a deep red day would produce a green ETF, but oh well. Um there's there it is. Cory right there. Um didn't violate [clears throat] anything. We haven't pushed above the gap, but I was so annoyed with it cuz I thought that was in the bag that I just got rid of the thing. Um and we looked at XK already, so um yeah, never mind. Let's move on. Okay, oil. Uh oil is of interest because for all this time we've heard uh you know like weeks and weeks and weeks ago it's like we're not going to do anything else with Iran till after the elections. So the the war was you know scheduled around the elections and of course the big question is well now what you know like tomorrow do all bombs start going off again? The the chatter is no. Um [clears throat] even to this very day there's been peace talk rumors but the importance of that with respect to propping the market up kind of disappears like now. Um [clears throat] a lot of things change today and and the the the main point I made in my video that I mentioned was that the impetus to prop things up vanishes in hours. um they have not only no reason to prop things up, but they actually kind of have a reason if things don't go their way to just I mean not malignantly harm it, although I don't rule that out, but basically like eh your problem, you know, you voted for this, enjoy and just cross their arms and just let let it go, whatever it's going to do. Um because the thing is that as I've said uh the one and only achievement they've got to point to is the sky-high stock market. And if that didn't if that didn't cut the mustard, it's like all right well you're on your own. Um so we'll see what happens there. Um if the uh you know anything vindictive happens or at least passive passivity holds sway. Um, I also believe and I mentioned this morning and I said when it was announced that the Bessant bond buyout bonanza uh ends now. So him scurrying about gobbling up tens of billions of dollars on site everywhere. Um, that vanishes today. It just happens to end on election day of all things. Um, so although that's not the basis for my short, it kind of makes me feel even better about it. Um anyway, USO is up a little bit. I went off on that um politics and markets thing, which I'll end the program with because I do have some thoughts about uh certain financial instruments and how they may be affected. Uh XOP is down, but it's looking kind of ready to pop again to me. That that looks pretty weak right now. I I've avoided energy for a long time. Um but the charts are still interesting. XLE. Um, uh, it fell hard yesterday and yeah, I'm my dumb guess is that those things are going to bounce higher. Uh, probably starting very soon, but I'm staying far field from it. Um, I mentioned being short gold. I'm still short gold. Um, here's GLD. This pattern, which is everything above that red dash line, um, is very compelling to my eyes. And I've uh you know, gold itself is below the psychologically important $4,000 level. And I think the next target for gold is $5 or $600 lower than here. Uh on GLD, which doesn't perfectly correlate to it, it's not like you multiply this by 10 and you get the price. It It's close, but not quite. Uh the next really major support is way way down here, even below 320. This this is just this is just open air, you know, cuz it very very swift ascent through this. It could be a very very sort of descent through this. Um miners down 2%. Uh silver down almost 2%. Um and you can see how nasty silver's own uh drop has been by way of the ZSL. ZSL is the leveraged ETF which goes up when silver goes down. And most leverage ETFs, as you know, are just wiggle all over the place because uh because of the simple arithmetic, but this one has recently been very consistent. Um from late August until now, it's moved almost double from about 20 to about 40 and without much noise along the way. So, Silver's really taking it hard. And one short I had that I covered a while back but just keeps eroding away is the Metals company uh down again today. And uh this is incidentally the the exact kind of chart that I love to hang on to and should have. Um but it's a beautiful topping pattern and there's just uh could go much much lower. I'm not showing it today, but another example of this that a chart that just goes down and down and down is open op is the most consistent. You could you could put a case knife on the screen and cover every price bar. It's so consistent. Um it's just goes down every day practically and has done for months. Unbelievable. So, another one I covered way too soon. Um now, as far as Bitcoin goes, this is down some. Uh we're down about $10,000 from the peak we had some weeks ago. And this will be a market worth watching also. during election night. Um because this administration has been very positive to crypto. They've been very supportive of crypto. They have issued pardons uh for for folks who are convicted with long sentences uh in the crypto world. So they've let them off the hook with a presidential pardon and uh they've got their own ventures. So they've been very very very crypto friendly. And that, you know, it's interesting, too, because a lot of crypto and things like strategy peaked a month after the uh 2024 victory. So, it's like, you know, hope springs eternal. Um, so the the maximum exaltation and thrills and and optimism about crypto uh was even before he was inaugurated. And obviously now we've gone from about $125,000 to about $77,000. So, we're many tens of thousands of dollars below the peak. And as it is now, it'll be interesting to see as the election results tumble in, what does crypto do? Um, I can't [clears throat] imagine that a a you know, blue title wave would be positive for uh for crypto. Um, for all kinds of reasons. I have no trade in crypto, by the way. Um, so just uh here's a just a smattering of um of of shorts. Uh this is obviously not the amazing day for shorts that yesterday was, but it's not bad. I just eyeballing it. About half about half my positions are red, about half of them are green right now. Kind of a mixed bag. Um here's just a few. So we've got Door Dash, which is tumbling about 4%. And I'm sorry to go head and shoulders happy on you here, but there's a lot of them out there. And so this is one right now quite wellformed. Not quite complete. We have to get below the lows we'd seen about a week ago for that. Um his side group down a little more than 1%. Big old top on this one. And um [clears throat] Lemonade Lindi up a little bit, but it's another one of those really ter terrific topping patterns that I've seen especially on these younger stocks. Uh there's our old friend Royal Caribbean RCL. And this is a whole series of um lower highs. So here's the lifetime high, lower high, lower high, barely lower high, and then another lower high here. So you can see it's like a it's like a zigzag, you know, like my my spotlight's gone as usual. Um we've been zigzagging up and down for many many months. So we've just zigged up here and I'm hoping we'll zag lower from there. And one last example, uh, Regions Financial, RF, and this is down about one and a quarter percent. Um, obviously this is a bank and it just seems like a pretty good setup to to my eyes. Um, interest sensitive stuff still a favorite topic of mine. Treasury bond ZB, we're down about 2/ird of a percent here. This pattern here, this little kind of semi oval, uh, is what I've been focused on. And we went up up up up up up up. And starting around here, I got really interested in this as a short. It's spent about 10 days just screwing around up here. And it really hasn't broken at all yet. So, you know, we're not going to have a victory lap here, but we're getting a bit of a dip. And but it's just been grinding around. And once again after the election, very interested to see what does this thing do? Um I don't try to think overthink these things like well what does the election mean to the dollar and how does the dollar affect this? I I'm lazy. I just want to look at one chart. I don't want to run around doing intermarket analysis. One chart's enough for me. So, this one chart says to me that this thing's going to either go down or if it goes up, it'll be really obvious uh when I'm wrong and not long either. It would not take much for me to just throw my hands up and say, "Well, that didn't work." But it's okay so far. Um the IEF is the one and only trade I have in this regard, and it's a big position. Uh it's down um about uh a little more than quarter% today. Nothing dramatic, just been is slowly going lower on this. And I've got my stop set uh up at um 91.80 on that. Uh as far as TLT goes, bonds, those are down a little bit more nicely, about 2/3 of a percent. And um this is not directly like a bond, but it is related XLF, the financials. Um I've avoided this, but I stopped avoiding it today. I I like this chart because we've got a gap right there at 55 I'm sorry 57.71 uh which is um almost precisely um where the high was yesterday. So here's the price cap, here's the high. So I shorted it today with a stop just above that line. So that's financials XLF. Um, now let's talk briefly about what are some stocks that I'll be especially interested to see how do they react to the election cuz I consider these I consider politics kind of embedded in these securities. Uh, one is Palanteer which of course just announced earnings last night. Um, I did short this today by the way uh based upon the same rationale Shopify which is uh the price gap. So I I can't remember the last time I traded Palanteer, but I shorted it today with a stop just above that price gap, but Palanteer is very married to this administration. So that'll be one to watch. SpaceX, another important one, Elon, you know, richest man in the world. Um a person spending about half a billion dollars on camp on on this election. So uh we'll see what happens with SpaceX based on the results in Texas. uh Axon Enterprises, the makers of the tasers and body cams, that's obviously uh related to the ICE efforts and the government purchases and Geog Group, which is the uh one of the private prison companies. I'm short this by the way. Nice little top on that one. So, that just that's a that's a taste of the kinds of things that I think would be worth reviewing tomorrow to see uh what happened, how do they react to the results. Um, couple of big long charts here. Um, the good old S&P 500. This goes back all the way to the beginning of the 20th century. 126 years of data and it's uh it's a fascinating chart. It's a log log scale obviously as I always do and we can see at this distance the uh back in the day it was a beautiful thing. bull markets and bare markets. They were it it was like um had an equal footing this cycling up and down with great regularity. Then we had the roaring 20s which by the way this everything bubble dwarfs the roaring 20s. We're in we're in a different 20s right now but roaring is not a sufficient um adjective for it because you can just see immediately that just eyeball this. This looks like three roaring 20s all chained together. Um unlike the roaring 20s, this one collapsed and crashed way below any prices seen in that entire century. And then we went into um [clears throat] the bull market of the postw World War II bull market and then the whole stagnation here and then kind of the first big tech bull market which was um uh you know back in back when this started stocks were borderline free. you know, PS were like four and five uh paid huge dividends, but we went up up up up up up and then we get kind of in the modern era here. And most of us only have lived through two really real bare markets. We got, of course, the bare market of uh the dot bubble and we got the bare market of the financial crisis and um then we're into the everything bubble. So, here we are up there way up high. And I'm amazed to hear people still talking today about, you know, getting in now while the stocks are kind of at a discount. It's like, are you out of your mind? I mean, look at this thing in a historical perspective. This is not a discount. They're just, you know, a shave below insanely high valuations. So, um, yeah. Yeah. Yikes. Um, as far as the Comp Q goes, doesn't go back as far for obvious reasons. This goes back to uh the early 80s, but kind of the same idea. And this one uh having a more clear breakdown um away from the the peaks we had seen, which were at this point way back about four four plus months ago. Um how we doing on time? We're almost out. Okay, so the only kind of interesting earnings this afternoon is AMD. I find the chart kind of boring. I have no position in it, but we'll be watching it with great interest because it's an important semiconductor stock. Um but as we look at the um the big futures out there, uh Dow Jones futures, this trend line is the key. The ES futures, this trend line is the key. And I do not anticipate this getting broken. But if it does, wow. But I don't think that's going to happen. I think at best the best the bears can hope for now would be a tagging of the trend line. Um and uh then finally that was the ES, excuse me. And then here's the NQ. Uh we are just at that trend line now, which is kind of interesting. So, um that is it for me. This is Hello. This is the last pre-election uh Tim you're going to get and we'll go into it tomorrow and see what the aftermath is like. Have a great evening. Good trading to you and I will see you in about 24 hours. Bye everybody.