Tim Knight Is Short 30 Stocks Into the Fed's Rate Decision

I will just plunge in if I can um and just kind of uh hit couple or three topics that are of interest. Um well here we have our friend the ES and that line is kind of the only defining feature of this chart right now. Uh for months over the summer it served as resistance after Bessant declared Iranian victory. We leaped over it and it became support. It has challenged it a couple of times. It looks like we're heading up for another challenge soon. We've got three red bars in a row. Um we are going to need to punch through that and who knows it may take the CPI number from Friday morning to to do the deed. Uh but we're make we're making progress. Essentially the big rally from Wednesday and especially Thursday has been control zed and uh we're back to where we were. So um that's a that's a vital uh level of support I would say. Uh, and adjunct to that, a little more interesting shape to it is the ENQ, which has been in a gentle uh, downtrend um, ever since June. And, uh, unlike the ES, which has had three big old red bars in a row, this one, it's almost three dogeis in a row. We're just kind of hanging out, trapped in a very tight range here. Um, you know, we're down 0.07% right now. Um there's a lot of on the positive there's a lot of uh AIdriven excitement based on Astra um and on the other there's just typical valuation concerns. So we're and and there's no earnings really to compel it one way or the other. Um um but amongst all this uh my own core trade um continues to be the most dull thing imaginable which is just the plain old diamonds. Um, as I made mention on Thursday, my view was that this bar, which um mashed right up against um the underbelly of a broken trend line, represented an interesting opportunity. So there's the bar itself. I entered the trade when it was smashed against that trend line. And since then on Friday, Tuesday, and today thus far, we've had a nice dip there. Um so um the diamonds are usually really dull but like uh similar to yesterday you know the the YM is down about 2/3 of a percent whereas the ENQ is effectively unchanged. So um get got this bifurcated market going on. Uh might take some profits on this. Um but if the rest of the market wakes up and starts to fall too I think the diamonds will just keep selling off. So, I will be quiet for a minute and get any feedback. >> Yeah. You know, um I want Kathy to take the first crack. Kathy, do you do have you are you noticing similar things to what Tim is saying or is how are you how are you seeing these? >> As you saw from my chart earlier, we were on the five minute and a two-minut chart, but um I think the overall backdrop is very similar. I mean across the markets we're seeing weakness in um S&P and Dow it kind of in the NASDAQ. The question that I have for Tim is that you know this morning when we were looking at the markets we were trading we were kind of trading the correlation between S&P and NASDAQ on a very micro basis. Now you just pointed out that there's also um a divergence between how the NASDAQ is performing and how the S&P is performing and you gave some great reasons for that. Do you use any of the um correlations in or the movements in the other markets to help you telegraph what could happen in um NASDAQ for example or in in in a different market that may not be moving the same way? >> Um no I I tend I think you and I have just met but I have a tend to have a longer horizon kind of a swing trader uh and even and you know the kind of narrative I'm looking for is really more in history books than kind of tickby tick data. So, I also I'm kind of a bottoms up trader. So, I'll look at, you know, a thousand charts a day and pluck out and organize what I think are the most interesting opportunities. And so, uh, like I I like at this very moment, I have 30 different short positions. And it can get worse than that. It can be 40, 45. And they're chosen one by one. Um, and you may point out, well, those three are basically one and the same. It's like, oh, oh well. you know, so it just it's just kind of a chart by chart basis and kind of creates this corpus uh that's based on that bottoms up technique. So, um a lot more hairrained, I'm afraid, than than uh than most uh is just kind of a an individual basis with stop- losses fine-tuned for each one and updated dayto-day. >> Yes. I mean, I definitely speak more to the day trader than to the swing trader. my world which is prop trading you know with the amount of lever better or worse you know worse probably than better a lot of the positions people take are much more micro and they lose picture of the they lose sight of the bigger picture as you pointed out which can also be very valuable >> yeah uh I don't show them here but uh one chart uh one style of chart that I've been obsessed with for months is is basically ratio charts of of precious vers equities of any stripe, you know, gold versus the Dow, um, um, silver versus the S&P, you name it. Um, and that has been kind of my north star because what those charts are all screaming is, uh, is is be bullish on precious and bearish on equities. And it it it'll probably take years to unfold. Um, and so yeah, that that's more that's more my speed, that kind of thing. Um let's uh on that theme since we're well I'll use that as a segue. Uh as I was sort of lamenting yesterday um the uh my desire for Bitcoin to ease back to say 67,000 to open up a precious opportunity still isn't happening. So I just kind of sitting here with arms crossed. Um Bitcoin uh has morphed from well we've kind of gone through three phases. We went through this like uh dull phase where Bitcoin's purpose became a way to store $64,000 and that was about it. It just kind of had no volatility. And then someone let a match and this thing exploded over 3 days in particular. And then since then we're kind of back into this waiting this this uh uh completely languid nothing happening just like we had back here. Um, and if I had a W magic wand, uh, I'd love for this to get hammered down to say 67,000 because I think, as I said yesterday, that would drag Precious with it. But we are stuck at these levels, basically 79,000ish. And in turn, um, gold has stabilized around 4,400. Um, yet I perceive this rectangle as a pretty important base just to augment that. If for whatever reason, Bitcoin got slam slam slammed and so did precious, I could see this kind of basing pattern get battered down to something more along these lines, um, let's call it 4,200 or so, uh, which I think would be a bargain for gold. Uh, silver in turn, it's actually quite strong right now. It's up almost 3%. Um, it has its own rectangle, but as I said yesterday, and I'll just repeat, maybe we're not going to get that sell-off. Maybe this is as cheap as it gets. So maybe it's time to get into gold and silver right now. Um I'm just not comfortable doing so. Um but I think those two are very uh interlocked markets. And I think that speaks perhaps Kathy to the correlation you're speaking about that I actually do pay attention to. >> I Yeah, aside from being a day trader, I'm also a macro trader. So I completely agree with you. Um we were talking about inflation and how gold and you know in some ways, believe it or not, Bitcoin is sometimes seen as the inflation hedge. And so, you know, gold's much smarter than, you know, um, Bitcoin, but I think that gold, you know, it broke out, like you said, showed in your chart. And I think, you know, that is probably the, um, clearest trade, uh, that we have outside of, um, you know, equities melting down. So, I completely agree with you on a fundamental perspective as well. >> Yeah. There's a gentleman there's a gentleman I listened to a lengthy interview yesterday and he he's a big gold guy. Um, I believe his name is Bob Klene. uh kind of pretty well-known uh and he had he was saying that uh the notion that oh well gold is sort of a disaster hedge was was silly because you know simply stated you know gold was $35 an ounce in 1972 and it's $4,400 an ounce now and where's the disaster I mean so for all those decades it has uh completely uh shielded people from the pummeling that the dollar value has taken and it hasn't taken a nuclear more to get us there. Gold has been precisely the kind of fiat debasement hedge that people would would would hope it would provide. >> I I just wanted to briefly reflect back on Bitcoin because Deb, did you both of you see the movie Inception with Leonardo DiCaprio? >> Um yes, >> if you there's an interesting part in that movie where um it's about dreams. It's a fascinating movie, Tim. I I think you'd like it actually. But there's a fascinating part about the movie. He's he's often in a dream state and he's often helping people get into a dream state. I bring it up because they had this thing where he had a drrele and if you could spin the drrele and the drrele forever kept spinning, you knew you were within a dream and something was wrong. And to me today, the fact that Bitcoin is up on a day where the 10-year yield is up and gold has been up. And if you've watched all this week in the last 10 days, when those when 4.8 comes on the 10ear, both of those get smacked down. The fact they're up today means that something we're in a fever dreaming something. >> Drrele engaged. Yes, movie. It's great. >> Yeah. May I just I know we're kind of out of time, but let me offer up one final uh specific idea, which is Meta. Um Meta has rallied mightily since um uh whatever this day is, uh yeah, August 13. So, we've moved from around 540 to about 650 or so. And today is a big pop on that, 5 and a quart%. uh AI of course uh this the Muse introduction I think is gooseing this. Uh I just shorted this before the show with a stop at 661 just above that price gap. Um long term as you can see it's still in a um you know well more than a year downtrend. Um and I just think that the exuberance around Muse and which is kind of feeding off the flames of uh Astra um It's u a little bit overhyped here. Um and so sometimes I show stocks no one's ever heard of in their lives. This one everybody knows. So just food for thought. Meta with a with a gap trade. Yeah, very strong move by Meta. Actually, I've had a long position here ever since some of those earnings and um I just took off uh half of the position and I may close by the end of the day. We'll see >> where it goes to. But um I mean look I know I see I like where this is going. Tim just give us at least one one or two more. Um I think this is going real well actually. >> Sure. Sure. Sure. Um >> yeah just kind of bouncing all over the place. Uh as as we all well know K's having another very fine day. Um I showed this chart yesterday and we um uh punched through punch is probably too dramatic a word but pierced uh that downtrend on this day and since then there's kind of been no looking back. um Brent crude uh who which must have a different symbol is is above the psychologically significant $100 level. Um but this uptrend is just it keeps on keeping on as the bad news keeps coming through. I don't show this because I trade energy these days. Um but I do think it's an an interesting part of the macro picture. And while we're at >> BZ, by the way, not to cut you off, but if you have it, I think it's BZ. >> Okay. BZ. Okay. Um, and I'll just uh toss down a um something like that. That's that's that's not a terrible horizontal to lay down. I would say that's a pretty interesting level of again, I'm being careful with my words here. I don't know if resistance is right cuz I think it's going to cut right through it. Um, but I I can easily see us uh not having to bother with the other symbol to find a $100 crude soon here. uh could be a couple of three more days, but we're well on our way. Um I would also note unrelatedly, but it's just kind of interesting to to look at that USD JPY continues to sink. Um I saw the interview or heard about the interview with Bessant where uh it's sort of like Palpatine and Star Wars, you know, I am the Senate. Well, Bessant has declared I am the House. um when it comes to this market right here, which I think is the kind of arrogance that the market gods hear and be like, "Huh, let's let's do something about that." Very dangerous to make uh absolute declarations like that. The market gods are always listening, but so far um he's getting what he wants, which is a sinking USD day today. Well, now you did it. Now you went and did it. Uh and and got our guest host excited. Maybe she's excited about this, but I know she's excited about the US dollar yen. Yes, you're absolutely right. I mean, dollar yen, we talked about this earlier. It's, you know, one of my favorite currencies to trade. And, you know, we have and Tim, exactly. I was going to ask for that. You got to zoom out to find those support levels. And I think minimally, you know, you've got um the January lows, which is I think is the next target level for um dollar yen. I mean, the January lows are 152ish, I believe. Um but you know if visually if you um draw your trend line you can see we have a major breakdown. I would have to even add in fibs at this point to look for any real support level. But I think that um 150 the the January lows year to date lows is minimum. if we get below there probably that gap zone that we had um I think is probably um the where we would target which interesting if you zoom in if you don't mind Tim the gap that we had okay right there um in October is pretty much exactly that fib level that we have as well which is I can't see it's 148 maybe 149 or so um is so there's a lot of room to the downside but I think as Tim pointed out it all has to do with US yields and what the Treasury is doing and you know they could turn around turn it around at any point um because you know that is it it's it's not up to Japan as much as they would like it to be. Um they're going to be raising interest rates at their next meeting um but they raised interest rates before and the yen has um sold off. So I think you know it really needs to be a dollar story here. >> Yeah that this is a very fibfriendly chart which is uncommon. Fibs usually are just noise, but in this one, it actually has a lot of interesting relationships with support and resistance. >> I knew it. >> Yes. And I think it's very clear. >> I I knew it. I knew you two were going to like each other off the rip. I I immediately knew it. And I'm glad that's the case. >> Oh, we we chart types stick together, you know. >> There's no doubt about it. Uh Tim, appreciate your insights as always. Fantastic stuff. And uh have a great morning out there on the West Coast. >> Nice to meet you, Kathy. I'll see you guys later. >> Nice to meet you. >> Byebye. many S&Ps down 24. We're still kind of weak here. We're going to take a quick 90 second break and then we're going to come and uh recap the morning here. You're watching Tasty