How Tim Knight Is Playing Metals to the Downside

Hello, Tim Knight here. And we begin a long uninterrupted stretch of trading days without any silly holidays to deal with. No forced days off, just charts and trading. My kind of world. And we've got a pretty red day on our hands. Um it has bounced substantially from earlier today. Um evidently um the president said that uh Iran wants a deal so badly and that caused a massive rally. Okay. I I wonder how many of these announcements it would take for the for the algos to stop believing it. A th00and 50,000 100,000. It I don't know. They they seem quite gullible for computers. Um although I suppose since they're not human we we should expect that. Um and you know I don't talk politics here. It has been forbidden but I've got the message. But it's it's it's odd because it's sort of like we're all drenched in water from a thunderstorm but we can't talk about the clouds. So I won't talk about any clouds. We'll just look at the charts and talk about support and resistance. Um, and that's what we do here. We we look at price action, try to find meaningful patterns, and uh anticipate what might happen next, and find out what constitutes being wrong based on a certain threshold being crossed. Cuz by no means is there any guarantee that any of the stuff I talk about happens. But what I try to do is at least suggest when the oops didn't work point is because there's plenty of those. Um well well um why is my phone beeping at me? No. Okay. Let's jump to the charts. Pin. We're going to start off with the spider and it ain't moving much. We are down.3% right now. Um we are still skyhigh up here. We have been tapping a little bit away at this price gap. We got below it cleanly on Thursday, went roaring higher on Friday, and we've been banging around kind of between those two days ever since. Um Thursday's low is still below today's low, and today's high neatly butts up against the low from Friday. So we do have a new price gap on our hands. But my point is that we have not broken with any resolution this level which is the big important price gap that uh Treasury Secretary Bessant created. And if we can fall below it and start getting some action Jackson then we do have a pretty wide range I think to work with. Um maybe these alibus would wise up about how badly um to use our second grade vocabulary. Uh Iran wants a deal. So um yeah, we are down a scoch, but uh ain't nothing really changed. We're still been banging around the same range for weeks now. The diamonds are down even less 18%. Um I remain short these and I've not been stopped out. the stop loss is anchored to just above Friday's high. And I did a video this weekend. Some of you may have seen about that. But uh even at the biggest bounciest, hey, they want to deal badly rally point, it did not get stopped out. And so, yeah, still the biggest um biggest position, small profit. Um and we'll just see how that goes. But it's still a nice setup. The diamonds are a nice setup. We're we're well below that broken trend line right there. And we've completed a pretty decent little uh failure of that range. And we just kind of got to let loose here, eat some fiber tablets or something because it's uh really clenched at those levels at the moment. And I prefer it unclenched to some degree. In fact, I've mentioned before, you know, because my portfolio is sort of a corpus of a lot of individual positions, it can really behave differently than the market in general because and we're dealing with a very low correlation market now. as I've been celebrating. Um, every stock can basically have a mind of its own now. Thank God. Um, and so there's some days when, and mind you, I'm like always really short. Okay? I'm like Hervey Villichas of trading. So, I'm always really short. And, uh, there's some days that the market's up and my all short portfolio is still up, which is right on. And there's some days it's down and I'm down even more than the market, which is also right on. there days like today I'm kind of stinking. Uh the market is down actually. Last I checked I was actually down a little bit. I mean I'm talking like hundreds of dollars like point something. It's tiny tiny tiny amount. Kind of disappointing but the stops were controlling. It's not like wow I suck today. I'll just close everything. No, that's obviously not how it works. I also don't want to get a reputation of a guy who's like everything always works. There are people on slope that every single trade is a winner. somehow they can't afford to pay for a premium service, but every single trade's a winner. And I don't believe them. I think they're lying. Um, but for myself, uh, some days stink. Like today, it doesn't even stink. It's just relatively stinky because the market is down, uh, decently. And, uh, for whatever reason, uh, it's, uh, my own portfolio needs a little bit of help. Uh, but I'm sticking with it because the stops are what control it position by position by position. I just keep them nice and up to date. And there has been one saving grace today which I'll talk about in a bit. Um QID is the ultra short on the cubes. Uh it basic for for every percent the cubes go down let's say this goes up times two and vice versa. And so the the quid as I call it the Q idea is up um a little more than 1%. What struck me as kind of cool about this from returning perspective is the gap fill. Uh today uh uh it opened quite strong because the NASDAQ was relatively um relatively uh weak. So the QID rallied nicely but then it got repelled by this. Um we are kind of basing here it seems to me and at its weakest I don't know if it was to the penny but boy was it close. So we got 14.83 83 on that low. Oh, it's exact. Goodness. So, is it a perfect gap fill? 14.83 was today's high in this day's low. So, a perfect gap fill. Let's see if we can cross that. Uh because we do have some basing action going here. And it's it's kind of fascinating to me how these uh leveraged instruments sometimes behave themselves more cleanly than the unleveraged kind. And we're going to talk about that too quite soon. Um, overseas EM down nice and hard. 2.29%. Like slamo whammo right there. Um, nice. Wish I was in it, but I'm not. I don't really tend to trade the emerging markets. Uh, but some of the um individual country funds I've been talking about have been doing well. Uh, South Korea, which has become kind of a fixation for me, is down almost 6%. And as we zoom in here, uh we can see a nice tumble there over the past couple of days. But and and clearly this is uh largely driven by semiconductors and memory because those have been quite weak. I guess because of this AI regulation issue and it's really fascinating to watch because I'm very very close to this topic. I'm very close to this industry. I know a lot of people personally and in a familial sense uh in the industry and uh there seem to be I guess a couple of broad camps. Usually uh in the world of business the government wants to like regulate and red tape and control and and and maintain safety and the industry wants to run hog wild and just leave us alone and let the Adam Smith's invisible hand do its work. Now it seems like just the opposite. Uh so that the AI leaders are saying we need regulation. This could kill us all. And in a rare moment of amity, people like Daario and Sam and Elon are kind of agreeing with one another because they hate each other. But now they're just like kind of holding hands. Kaya. Um so it's the industry that's saying, "Yeah, we need to be regulated." And the government's like, "Screw that. Uh let's see what happens. It'll be fine. All you need is a high IQ president and we'll be fine. Okay. Um if it doesn't go fine, that'll be interesting. So, it's a very upside down thing uh versus what historically humans and government humans and government uh business and government have have done. But with the concerns about AI regulation, it seems is the impetus or at least the excuse for um semi stocks, memory stocks to be showing some weakness um because there's this whole let let's slow down uh postulate going forward. So that has helped South Korea drop. But as I said this morning, um it's a pig of a chart, absolutely dreadful. Um, it uh it sort of wrecked itself beginning on August 12 and it's lousier now than it was even then. Just a big fat stinking mess. So, I don't touch it. Uh, but as we'll see a little later, there is something that I do prefer which is uh in the same elk. So, about 10 years from now, uh, EFA is down, although not nearly as much as EM. This is down about half a percent. As with the US market, it has shaken off the the lows of the day. Um, I'll just drag this um this line down lower. So, we'll just sort of anchor our new lower price gap. And I'll also note a couple of cool things about this chart. One, we're plainly below this uh broken trend line. So, let us uh do him the honor of changing the color to red. And we are below a very nice range here that I've just noticed. This range was kicking around from August 4 uh kind of up till Friday. We had this one outlier here, but we had a nice tumble. So, we've had two days here completely below that range. It seems to me this is truly breaking down at this point. So, that's EFA, a little little more mild than the EM. But, as I said, there are some specific country funds that I've been mentioning that are are doing nicely on the downside. Brazil. There's one EWZ. As we zoom in here, uh we had a nice tumble on Friday and another one today. Even with this intraday rally that which is why the bar is green, we're down about 1 and a.5%. Um and then Mexico EW down about 6/10 of a percent. This is kind of a cool one because we have a very clean symmetric triangle pattern which are unusual and we have broken and uh if one were just itching to short Mexico right this second wouldn't be a terrible time to do it with an appropriate stop loss because we have uh quite plainly broken below the triangle and we've rallied up to kiss the underside of that broken triangle. So it's kind of a nice riskreward ratio. Um, as I insinuated, the uh the the Iran dot dot dot crude oil market is what's uh throwing some element of depression to uh the trading, you know, because any day that everything's not bright green is, you know, people are panicked and so equities are down a little and it's because crude oil's up a lot. Um, we have been I I kind of walked through this this morning, these various phases. No need to repeat that. Uh but in short, I will say that after this explosive move higher and this collapse, which perfectly perfectly perfectly found support exactly where God intended, then we've rallied again. And the question is, is it just going to keep going? Are we going to beat the kinds of prices we were seeing in March? Um the administration's getting a little freaked out because this is not good for them. And the longer this goes on unanswered, that is to say, the longer there isn't more bad news, but no good news, this thing is inclined to just keep going higher as inventory shrink and the um the ubiquity of the problem becomes apparent. Um so crude oil continuing strong. Uh USO also strong obviously. Uh, it's interesting to me though, but because some companies that you would assume would be just loving this and doing great have actually kind of run out of oxygen. Um, I guess there's only so long you can push on a string and see a result because there are companies that whose whole business is energy production and usually follow tick by tick whatever crude oil is doing that just can't seem to move up anymore. I don't know the reasons behind that but they must be real reasons because there's a lot of very smart people trading these things that have decided to get out and one example is slumber SLB with oil going up and up and up. What's SLB doing? Look at this red red down over 5% today alone having fallen from 60 I I'm sorry from Is that true? No. Yeah. 60 to 53. So that's uh a little more than 10%. That's not nothing. And it's interesting as I said, VLOO, a little less dramatic, but on the one hand, right near lifetime highs, you can see what a remarkable run this has had. Just hundreds and hundreds and hundreds of percent higher. And yet it's uh and and at a lifetime high today. But we've got a bearish engulfing pattern and it is down almost 3% uh with oil uh well into the triple digits. So worth noting. Um if one were to short this, I imagine any weakness and crude oil would really start sending the thing lower. But um I'm I'm just not messing around with with energy myself. Not because I've got some sort of ban about against energy trading, but because the the charts that I look at, nothing really leaps out to me as a great opportunity there. All right, let's return to a favorite topic, semiconductors. Um, I mentioned a saving grace today. SMH is the saving grace, because I got back into options on this last week. Um, and those are up nicely. their January puts and I uh took profits on about 40% of the position today but just in case it rallies. Um but I think that we've a good short it's completely within the realm of possibility that we'll keep sinking around 515 or so which is the um which is where that trend line is. That is to say the lower line of that ascending channel. So those were up quite sharply and so that made today a pretty good day in spite of the lackluster results elsewhere. Um SOXS which is the why am I reading these? They're right in front of you. Uh this is the um um basically bearish semiconductor fund and uh it's leveraged. We're up over 15% on this. And then we have the one that I was mentioning visav ew y uh k o ru. It's like I'm reciting the alphabet here but mixed up. Um the point is that this chart is dramatically cleaner than ewy. It is not a big pen. It's actually quite clean. And the red line that is anchored to Friday's low I think constitutes a good stop loss on this. I had back here on the 9th um did a post on slope that said for the first time I'm shorting this thing which I usually don't do because these this is like this like triple this is like playing with fire triple leveraged instrument but for the first time I'm going to short this that was perfect timing cuz you know it we did have a rally on Friday but it wasn't even didn't even recapture where I shorted it and we've got a nice drop here. So, we've moved from over 25 down to the teens. So, more than a 20% move in three trading days. So, K K K K K K K K K K K K K K K K K K K K K O R doing really well and has plenty of downside, tons of downside left, I think. Um little less dramatically some individual stuff. ARM Holdings, ARM, this is down um almost 9%. And then Cabris, which uh IPOed earlier this year back in May, it's getting in the vicinity of lifetime lows again. It's down over 5%. Um LSR, which is Inlight, this is a pattern I pointed out some weeks ago. We're down again on this one. And then my only individual uh semi short AOI uh applied up to electronics is off almost 8%. And so across the board I've just tighten up stops on these. So some good activity there. There are some other tech stocks that uh that are doing interesting things. We got QuTO technology which is down almost 7%. Um it's lost half of its value approximately from its peak. Uh SanDisk which is uh also very ugly chart. It was beautiful but it got very ugly on on as of this day right here. I think I highlighted this on Friday. It was so pretty back then. But um it pushed deep into its pattern. So it's just a big sty now. Uh but we are down at least on this $73. I'll just toss a U line there to anchor to Friday's um low which is our price gap. Uh I am however short WDC Western Digital uh which is in the same sector as SanDisk and as with so many stocks right now it opened weak. It's trading strong right now but even so it's down 3%. And my stop is at is my renewed stop. My lower stop or conservative stop is down here at this red line. So like 443. Um and it's a unlike SanDisk, it's a very nice pattern. And uh if it can get below this 407.34 um support level at the horizontal, then um then yay, that'll that'll exacerbate it, I think. Um, Bloom Energy BE is down almost 6% price gap on this one like so. And we've got Caterpillar also short down over $30. Um, and it's probably overly tight stop on that. Um, but the target on this shortterm remains down around 723. And it's a very good-looking pattern. Very nice looking. And this is the sort of thing that if you said like a year from now it'll be less than half its present value. Absolutely could believe that. Yes, I can absolutely believe that. This could be an amazing longerterm put position. Um what else? Ah yes, Larry Ellison Oracle off almost 5%. I'm I'm also short this. I'm short a lot of stuff. You know how it is. Um but this is slipped down too. So all these like hypers scaling related companies. Um just weird one to throw at you. Rubric which I have no position in but just just to be not purely bearish here. This is a weirdly robust stock and this one this one looked like it was doomed a few months ago but it it rallied rallied rallied. It has busted above this trend line. So let's let's let's be fair. Let's make it green. make it a support line and lifetime high here. It got smacked down, but look what it's doing now. It It's found support and now it's starting to rally. So, I wouldn't touch it myself, but I just hats off. You know, whatever they're doing is working. Rubric is exceptionally strong in this environment. Um SpaceX is still um just kind of grinding around 150 that uh that horizontal there. It seemed to have broken out last week, but it's just monkeying around here around 150 plus or minus a couple of dollars. Um, and but frankly, considering all the angst about AI, it's not a bad day. You know, it's only down about half a percent or so. So, it's uh it's hanging in there quite respectably. Um, I'm glad to have nothing to do with crypto anymore. Uh, talking about robust, it continues to be very very strong. Um, it's up about $2,000. We're approaching 80,000 again. And as I said this morning, um if gold and silver can get their act together at some point and start to rally, I could absolutely see Bitcoin pushing back toward even the six-digit level. Uh cuz this thing is weirdly strong. Um even in the face of all this selling, it is really um outshining the metals for the moment. Um which strikes me as odd, but I'm not going to argue with the chart because charts is what I'm all about. And uh Bitcoin's really uh has been taking its vitamins and you can see that in uh related stocks as well. Um Strive as up nicely another record high for strategy STRC and uh companies like Bullish BLSH which is uh up almost 7%. So, all these equities in the Bitcoin orbit are um are really doing respectively well. And I don't know why, but you know what? It doesn't matter one bit. It they're doing what they're doing for some for some reason. If nothing else, more buyers than sellers, right? Uh unlike crypto, uh Precious continues to sink, which I like because I would like to buy these things cheaper. Um it's really unclear to me how low they'll go. Um, we are making good progress toward that green base that I've been talking about. Uh, GLD is down about 1 and a4%. On gold itself, we've sunk from like almost 4,800 down to u about 4,300 now. So, it's come down 10% plus uh in the past couple of weeks or so. And it could just keep sinking. And I think Bitcoin and gold merit close attention to see if and when an honest to goodness bottom can be found on this. Uh silver is down uh in a very similar percentage fashion. And we're just kind of grinding along this trend line right here. Um so I'm still not touching it. I and I don't have a clear target into how low those things will go. Uh we'll see how they behave if they can reach the base if they just kind of melt back into the base or not. Um palladium PAL interestingly same percentage drop there too. And you can see that uh the the the the faceoff between this bullish pattern here and this bearish pattern here has pushed this thing into almost a perfect state of equilibrium. that blue line which is the base of this and the bottom of this. So that's been mushed down uh pretty hard there from its rally. Uh one thing that is more plain is XME which I mentioned last week as being the most attractive um way to get bearish on metals because of copper's life lifetime high price and the fact this is a blend of precious and non-precious. And this is sinking nicely down 2.6%. 6% and I've dragged this down to that lower price gap anchored to Friday's low. Um, but as the gentleman prior to me were speaking, uh, the the U peasant and his what is it? U Operation Economic Outcast. We should do that with an echo effect. It ain't working. Uh, bonds keep sinking, rates keep going up. his uh USD JPY trade in which he foolishly declared that I am the market and if you want to take the opposite side you know basically God help you. It's like the market gods I mean it doesn't matter if you're treasury secretary the market gods will respond in kind the ancient Greeks figured out the consequence of hubris that hasn't changed so Mr. your best in sort of rediscovering this in spite of his in spite of his lofty words and his his um and his arrogance the gods are like and so what's going on well what we've got here we've got uh you know the ZV continuing to wither away uh we've got TLT um since and I'll just highlight it here the uh the the day that he announced this was right here now to his credit worked for a day the next day bonds did in fact rally since then though down we go. So it's not it's not working. And this is with all the buying going on. This is with the execution of because it wasn't just bluster. It's like you know we're going to double at least our purchases of these bonds. It's not just talk. It's action. These are honest to goodness trades happening. It's not working. Um and any interest sensitive instrument that you look at has been sinking lately. Here's IF. This is the 7 to 10 year treasury bond ETF. Uh corporate LQD. This is the US investment grade breaking down under this very good-looking topping pattern there. That's a very important uh reversal pattern there. Uh and a favorite of mine, XLU, which goes back for for decades. Look at this uptrend through the ascending channel. And look what's happened. Look at this. Look at this distribution top. Look at this failure. We have broken the midline of the channel, a multi-deade channel. This opens up uh a trapoor here to much lower prices. So, it ain't working. So, just to wrap things up, uh keep your eye on semiconductors. Uh here's SOXX, different flavor of ETF here. New price gap. Uh not a clean chart at all, but we are slowly and sloppily working our way lower. uh XLK uh ETF. We are in the middle of this rather wide range. We've got to get below uh this support in order to really get some selling going. And of course, Wednesday is a big day with the Fed. Um and uh equally as important, probably more so, are the cubes, which got tantalizingly close to breaking its own support, but did not do so. So, we got to break under 701.59 to uh to set in motion some more selling there. So, anyway, quite a red day. Hope you're doing all right. This is going to be a very interesting week and month and balance of the year. So, I look forward to sharing it with you. See you tomorrow. Bye-bye.