Why I'm Still Watching This One Chart | Tim Knight

And so I've got a few charts to maybe thumb through, talk about. >> Let's do it. >> Good. The dogs do it. >> Yeah, the dogs are trying. I mean, even a thick wooden door can't shield us from them, but it it does what it can. So, um, crude oil. I'm not trading energy. I don't uh I'm just not. But it is a pretty fascinating critter because of course Iran has dominated this year uh in terms of um news and some measure of effect on the market. I mean it's very tiny. I I was reflecting that uh in 1987 you before Black Monday it was like one strike on an Iranian oil rig or something uh was one of the reasons blamed for a crash which would be the equivalent today of 12,000 points off the Dow in a single session. So it was a big deal. These days you can go all weekend long with endless firefights and blow up, you know, explosions and multiple rigs getting attacked and the market's like let's throw the NQ up triple digits. So um the the crude oil is responding unlike equities uh uh to any degree and from a chart perspective um we were anchored here to the tippity top uh in a downtrend but that all ended um right here uh at the end of August and it's not been incredibly dramatic but we are definitely heading higher. I mentioned just getting off a plane. I I sometimes state how amusing it is to me if people talk about $4 gas. $4 gas. Like try $7 gas in California, but I was in the land of $4 gas. It was weird to see. Um but it ain't going to be $4 for long at this rate. We are just lumbering higher without any particularly large change in the conflict. It's just kind of going where it's supposed to go, which is easing up, easing up day after day. Yeah, 93 in the 9-day now with a three-point backwardation. So, we're getting back up there. And I think more importantly, the 250day, the 220 day, those the end of the curve there >> getting well above 75. These were in the low 70s, high 60s just a few weeks ago. And now we are >> we're almost at 80 in those in the end uh of the curve there, which is a little scary. just this one chart we've moved from I know this is very crude granularity but we've we've moved from the 60s to the 90s and the notion of triple digits is not out of the question this month um I mean one bad news story would do the trick so just kind of a something important in the background um I will say that this is a really murky market right now even more so than usual because there's some I'll I'll offer a couple of examples there's a couple of um broad themes that are very tough to to really declare because there's so much uncertainty. For example, I would love to go crazy along precious metals. I'm hesitant to do so until we can get a good strong whack down with Bitcoin. It hasn't happened yet. Uh what I was hoping would happen, it might still happen. This is not out of the question, is that following this huge rally that we would ease back down to say, let's call it 67,000. And at that point, I think it'd be a terrific time to just go nuts buying silver, buying gold, buying palladium. Uh but it hasn't happened yet. And what's been happening instead is that we've blasted up here and we have just been hanging out. Um in fact, we were at a recovery high only yesterday. So we've been in the the low 80,000s. And you know, my I'm hesitant to like, okay, fine. It's just not going to fall. I'll buy precious and then see this thing fall. So, I'm I'm still not doing anything on this because of this blob up here. It just refuses to go down. So, as we look at gold, which um is really underperforming underperforming crypto um we can see that it's trying to find a happy home above this base and silver kind of the same deal. So, my point being that uh on a long-term basis, I want to be long precious metals, but on a short-term basis, I'm uneasy doing so because I don't want to wake up and see, oh, Bitcoin's finally lost its, you know, $13,000 of puffery and now things are are cheap again. So, yeah, >> that's the end of that statement. >> Yeah, this is a super interesting one because uh like Chris mentioned this morning, Chris Veio talked about the correlation between gold and Bitcoin being at at its highest uh in quite some time. And again, this is all kind of rate related. We saw the huge move after um the the idea of buying bonds back, which again I I chuckle because talked about how small the amount of buying was compared to the bond market. But nevertheless, we saw the huge move to the upside and now it's pulling back for similar reasons. So, um I don't know. I it's it's kind of all driven by that story to some degree, right? >> Yeah. Yeah, I mean I I've sort of dropped half of the theme, which is I I've stopped bothering being bearish on Bitcoin based on the prospect of that fall, but I've sort of like taken both risks off the table because not only am I not defying crypto anymore, but I'm also not participating in the long-term precious rally that I think is going to be unfolding for months. Um, now what could happen absolutely is that Bitcoin goes 82, 83, 84, 85 and then just gold and silver just follow right along and we may never get that dip. Um, and at that point, I guess I just throw my hands up and say it's not going to happen. But as it is now, it's just kind of grinding around um the $80,000 mark, plus or minus a couple of thousand bucks, and I'd rather not participate. Um, one item that's interesting, but I don't have any reflection on, maybe one of you gentlemen are both well, uh, is what's going on with the, um, the cross rate with US dollar and the yen. I realize that, um, Besson has made it clear that he wants this thing to go down and whatever intervention they're doing is working so far. Um, I have to suppose that any strength we have seen in precious and more so in Bitcoin has been driven by this drop. But I'd be interested to hear either of your perspectives about um what you think this is really affecting the most. Yeah, I think it'll be interesting to see what plays out. But it it feels like this currency is just one of those that's like super dri just kind of it's kind of it feels like it doesn't move on its own. It's like there's things in play that yank it in either direction and then maybe the market tries to offset it. We've seen that a couple times here uh with the big steep draw downs and then the kind of slow grind higher, but uh yeah, I think it'll be interesting to see what actually plays out and how that creates another reaction in this in this pair. >> Yeah, I think it's >> like sometimes you hear Oh, I'm sorry, Jamal. Go ahead, please. >> I think it's fascinating how uh like you said, how how the US government is now all of a sudden involved in this currency. And so, um yeah, this has been a huge move. I am annoyed because I actually had some yen calls and um I I put them on after the first u I well the first down move obviously correlating the first up move in yen and then again that that move was erased and I just I just capitulate on I think early last week and now I just got back in cuz this story might not be done. Well, I think of the metaphor sometimes offered in trading of trying to push um like a a play ball down into the swimming pool that's filled with air and it wants to pop higher, but you can push push push. And so when you look at this, it seems like uh USD wants to go higher. So over the long haul when it's sort of left to its own devices, just up up up up up. And when it does go down, it's due to an express and loudly declared intervention. you get like wham over just two days and then kind of goes back to its natural state of being and then wham over a few more days. So we're seeing this to me is kind of the natural direction and this to me is kind of the politically driven direction. Um but I just don't I'm not a forex trader and or intermarket trader and so I didn't really know uh except for how it affects precious >> um maybe what this really meant over the long haul. This is just a blip. I mean, these aren't giant moves, but um the forex market tends to move very very mildly and so seeing seeing um bars like this is kind of um out of the ordinary. >> Yeah, agree. >> Um yeah, wanted to um just on a more positive note, uh want to say something that has been working well, which is uh over in um in Dow land. Um what had happened and I think a better chart for this is actually the the diamond. Um what had happened on Thursday um when I was last on was that and this was on my afternoon show I think uh I noticed this very interesting trend line which is anchored back to um uh way back at this uh April low um which I guess would have been the um the the the Iran war commencement low. And what caught me about this, as messy as a lot of markets are, is that the Dow had rallied right up to it, right? Like so. And I thought that in this messy market of ours, this was the pretty much the only clean ETF trade I saw. And so I entered a very large um short position on this uh Friday. Um it went the right way. Nothing dramatic, but basically undid Thursday's gains in today. Even nicer. And it's particularly striking to me because I was watching futures on the plane and in the morning and all this and uh even with when the ENQ was up triple digits and the ES was green and all this um the YM was down 300 and 400 and 500 and 600. So I'm getting we're getting that sort of bifurcation again. Um reminiscent of early um 2000 and so I'm sticking with this one. It was a good entry for once um and it's it's working the right way. So this is kind of an outlier like semiconductors and such been very strong lately I guess because of Astra I'm supposing but the YM the old school the industrials uh this trade's working out very very nicely and the next goal of course would be to cut below um these lows that we've seen in recent weeks. Yeah, it's um it does look a little bit weak here and we're listing off some of those names that are that are down uh in the Dow this morning and this is one to watch especially I think with this interest rate thing we've seen that in the past right Dow and Russell 2000 so something to keep an eye on for sure >> um let's see let's see anything else um I don't know I'm I'm I'll just I'll just say without charting through it that uh semiconductors has been um on the one kind of a disappointment, but on the other I'm looking at as possible new opportunity. I was pleased that I got out of almost everything semi-related last week because we've really seen a lot of strength lately. Again, I'm supposing because of the enthusiasm over um JIGPT6 that is Astra. Um but I did reenter um SMH this morning and I've got a fairly tight stop on this. I said I wouldn't chart it. Here I am charting again. Uh right up there where that price gap is. So um this this beautiful reversal here is kind of kaput. Um we have violated a little bit this downtrend. Uh but I've gone ahead and entered a small trade here in SMH on the short side once again with that price gap as a stop. So this is a we'll see what happens kind of trade. >> I like it. >> Awesome. >> Awesome. Sounds good, man. Well, uh thanks for your insights as always, Tim. We're all looking at the same things it seems like right now. So I guess this >> All right. Well, good to hear your voices and look forward to seeing you tomorrow morning.