Tim Knight Says Emerging Markets Just Broke a Trendline for the First Time Ever

Let's check out those charts. Got them pre-loaded for you. And as always, we've got the spider here, which is doing bupcus. Uh the spider has spent the past six trading days doing absolutely nothing. Uh we are essentially right now where we were 6 days ago. There's been a little of wiggling and waggling in those days, but just, you know, look, this this is nothing. This is DOA. And I like that because shorts are going well. And if shorts can do well with this sort of preposterous environment we're in where things somehow are managing to be propped up, um, that's good. Uh, cuz like I said, I've spent all this time finding ice cubes that do not melt in the sun and the sun is still out and they're not melting. Or I guess the metaphor falls apart cuz I want them to melt, but you get what I'm saying, I think. Uh but yeah, the spider is uh crashing down 0.05% and has been grinding around and I suspect maybe tomorrow will be different, either good or bad, uh because we're going to get the last data point of the political year. Um the last pre-election data point [clears throat] and the last FOMC data point, which is the CPI. Um, I don't know how true and real and accurate the numbers will be. They will be numbers of some kind. They will be from a government that desperately wants them to be cool. So, that may have something to do with what you see. But, uh, ostensibly, the the year-over-year inflation is supposed to come in um, uh, what was it? I I want to say 3.9%. Um, which is a little odd because you can make 4.3% at a risk-free bank account. So, it's not often you can beat inflation just by throwing into a a bank account, but supposedly that's what the inflation data is. And I in my experience, I don't think so. So, that's the that's the spider just kind of lolly gagging around with no breakout. I was concerned about this kind of thing just a bursting forth from that, but it has absolutely not happened. We are just languishing. The diamonds are down a little and this is kind of interesting to me because uh they started off strong today. They've been strong for the past several days and I had stopped messing with them and if I was really on the ball uh you know it would have been made made sense to short them right from the get-go, but I was not interested in that because the diamonds seem to be just vitamin fortified. They just kept blasting higher. Um the fibs that I've laid down here yesterday seemed to do a pretty decent job though. Uh because that was resistance right there. We opened very strong and then have been sinking all day long. We're near the lows of the day even though a lot of other markets have bounced to some degree. Um bonds are up again. Here's TLT. And as you can see for the past 1 2 3 4 5 days we've been zipping higher. Um when it'll stop, nobody knows. Um it kind of makes more sense for it to stop now, but it could keep going. Um the higher we go, the murkier and thicker and more resistant all this overhead supply becomes. This red line is the base of a lot of overhead supply. All of this. And then it's even worse once you get above this purple line right here. It's very very thick with that uh resistance to price. So I I don't I'm not pounding the table with like how far it's going to go up or down. Um I simply would uh be pleased if it stopped round about now, but it's not necessary. Um if we get some bogus number tomorrow that rally spawns, they could push easily uh into this area and approach 80 again. Sure. You know, depends on how aggressive they are in dreaming up those figures. Um IWM is down. I'm short IWM. I have uh got a stop right there at that red line. And um it's down, you know, about a third of a percent. No big deal. And its next meaningful support is down here. So not not exactly an enormous um range, but you know, I'll take it. Um overseas EM this is little bit of big news. For the first time ever, we have broken the ascending trend line on this chart. And this this uh chart goes back to spring of last year, the bottom of the liberation day plunge. And uh we've cracked that today. Um, so support is here, resistance is here, and the last time that we got in the vicinity of resistance was uh around about here, and then we sank, tried to rally again, failed to beat the last high, sank, tried again, failed again, tried again, failed again, and now we've snapped below this trend line. So, uh, interesting. It's interesting that uh we're seeing a little bit of weakness there. And you know, I'll just pause here and say that a lot of what I'm observing has been uh a very weak open today and an attempt to rally. And as I said with Jeral this morning, uh my actions were one of three. Uh one, tighten up the stop. two, reduce the position and tighten up the stop. And three, in just a few cases, take the profits and be done with it. Um, so I came into the day quite aggressively committed, like 205%. And you know, I'm not like all cash now, but I've trimmed that a little bit to aboutund 130% something like that. So I have backed off to some degree. Um, and I'll probably breathe a little easier tomorrow once we're past the uh totally true and not made up CPI numbers. So, um, I I've I've backed off a little, taking some profits. Um, EFA is actually up a little bit and its own resistance is at this price gap. Um, could be interesting short if it gets back to that gap, but I'm not really doing anything with it. Um I've been focused instead as I mentioned earlier on uh South Korea and uh I keep mentioning that because you know out of when I came today with like 30 positions you must be thinking well are 20 of them South Korea. No out of 30 positions one is South Korea. Just one. So why do you keep talking about it? Because it's it's as I say kind of the north star. It it's my it's the observation I have that this is saying something's going on with all that tech. The setup for South Korea indicated to me that memory, semiconductor, storage, all the hyperscaling beneficiaries were in for the beginning of a of a hard time. So when I talk about South Korea, South Korea, it's it's only one position and kind of a small one too. Um, but it's the what it means to the others. This is why I keep talking about it. Um, here's EWY. Kind of the same idea I said earlier. A weak open and a strong present. Um, it could keep rallying and for me, although I have no position in this, um, resistance is right up here at this price gap. And the funny thing is I've been decrying the lousiness of this pattern because of this mess, but it's sort of redeemed itself because we are cleanly below this line here. And now we've got sort of something to work with. Uh we've got this top here and then we've got this weaker top over here. There's no name for this. You know, the twins, you know, starring Schwarzenegger and Dvito, I guess. you know, you've got the big one and the little one, but this isn't a pattern per se, but at least we've got a horizontal line to work with there. So, we've got a, you know, this used to be like a D+ pattern. Now, it's it's kind of a B+. So, it helps a lot that we've had this drop today. Um, the one and only short I have, as you know by now, surely is our radio station KU, which is down almost 9%. And here we have the gap which uh for my and this is one of those ones that I trimmed some because the the riskrewards was getting too gross. So I wanted to I've been taking profits on the way down and my stop is set just above that dash line. So for whatever reason South Korea goes crazy up then I'll I'll be out of there quick. Um ultimately of course what we want to see is a failure of this um horizontal green line at 11 and a half um to complete this tremendous and this very well-formed head and shoulders top. And if that happens, I think we may be looking at a complete tech wipeout. Um so good, but it's not there [clears throat] yet. It's not there yet. A a a pattern in formation is just a pattern in formation. even if even if it's 99% done. Um but this has really been helpful because semiconductors had looked so so strong up until just about a week ago. I mean as of here um earlier this uh month I mean semiconductors had really recovered you know they had they bottomed here rallied weakened and then really started to have some momentum and uh since then over the past Yeah, six days. And interesting, the the same six days the spider's just been grinding around are the same six days that tech has been slowly falling to pieces. Uh, and so it's kind of refreshing to have a green day. Um, I'd much rather have um, you know, this is not the slope of hope I normally talk about, but give the bull some hope that, well, it actually is kind of the slope of hope because, you know, it's like, okay, it's over now. You know, there's some buying going on, there's some strength going on. we've seen the bottom before it rewakens and works its way lower still. So, it is good to have these pauses. Um, the cubes are off about half a percent. The island reversal pattern I pointed out has been exceptionally helpful in signaling uh what began here because um on the day I wrote about it and pointed out we were very close to lifetime highs and we've slipped nicely since then. You know the NASDAQ dropped about 83% after the internet bubble popped. So I'm not jumping up on my desk about a 2 or 3% drop here that we've had in the past few days. Um, but some individual issues have been uh working out very very nicely. So I guess things in Iran are still up in the air. Uh oil continues to be strong. We're seeing USO push higher here and um there's really just no news um no no big news nothing really no shape shifters but it is slowly strengthening and we are really seeing that with these ETFs that I've been pointing out um and I'm just going to leave these up here because it shows how nicely it shows quite cleanly um how we were in uh what looked like a small top but it is just blasted higher almost without taking a breath for the past couple of weeks. So, XOP zipping to a new multi-year high uh and then XLE zipping to a lifetime high. So, for all the modest amount of pain going on in tech, the Exxons and the Chevrons and the KOS and the Phillips are all high-fiving each other because this war has been wonderful for them. So energy is doing very very well. Um precious metals can't seem to get their act together. Uh nothing too dramatic, but just kind of day after day slowly bleeding out. Um here's GLD. It's not off by much, but it is not poised for a rally. Uh it has spent the past couple of weeks conquing its head against that dash red line and uh it could go down hard tomorrow. I mean, I'm not betting on it. I have no position at all in any metal at all. Uh but if looking at this chart, it seems to me far more likely that we're going to sink hard instead of suddenly burst forth above that line. I prefer the latter actually, but it does seem to be still uh tied very much to what equities are doing. So, gold GD continues to be weak. Uh the miners continue to be much weaker on a percentage standpoint. And they too have had their own red line that the past couple weeks they cannot get above. And it is far more likely, I believe, that we're going to sink somewhere in this zone as opposed to just for no particular reason chopping wood through here, you know. So, um, gold vulnerable, miners vulnerable, uh, and, um, silver also down even more than either of those. SLV is down one and a half%. And the next major test of that will be that green line, which is the low for the year, which is a pretty thin gr uh for those hoping it stabilizes to say, well, gosh, I hope it doesn't go to a new yearly low, but that's kind of all all we can hope for at this point. Um, having said all that, um, I'll say that XME, which is just the in general metals and mining ETF, also looks very vulnerable to continued weakness. Um, kind of wish I held on to that position cuz that was a really good one, but it continues to be quite weak. Uh, and I I mentioned earlier sort of my three things about, you know, tightness stop and partial cover or just get out completely. This next one was a get out completely one. uh which is TMC, the Metals Company. Um this is probably just like most of my covers, a mistake. Um I'm not showing it here today, but there's one I was short open OPEN and it looked kind of like this. It had fallen a lot and I took my profits and it hasn't stopped falling since. It's like it's like I I guess it's going to zero and just every day it falls again. I probably going to have it again here. TMC is a terrific looking pattern and this had fallen very very sharply almost without uh a pause for weeks and maybe we're getting some stability here. Don't be surprised if this just keeps plunging. And the sad thing is and you've probably been there before. I just don't have the heart to get back in again. You know, you're kind of admitting to yourself, well, you screwed up. So, how about you go in at a much worse price than you got out? Can't do it. So, on the other hand, if for some crazy reason it does rally, if it if it got up to that little pink zone again, like 3.4 something, I'd be delighted to get back inside. Uh the same holds true, by the way, for QBT, which was uh one of my shorts and one of the one of the others that I decided just to take profits on. It's a fantastic pattern. Um, and there's a if we get a rally, I'd love to get back in, but as it is now, I just decided and uh I was satisfied with what was there. Um, SpaceX exactly as I thought, keeps falling. Uh, on this day right here, we had this little shooting star. Um, I spoke to a family member about selling. Uh, you know, he asked me, should I sell? I'm like, nah, hang on for the long haul. And I I still stand by that, but I knew it might be a good time to to take some off the table. Um I won't worry until this thing like shatters 150. Then we got something to worry about. As it is now, these two huge updates um are getting burned off and I suspect they'll get fully burned off. So, um, I would say adjunct to that, poor old VCX, the Fundrise Innovation Fund continues to get clobbered. Uh, it's down to a lifetime low again. And, uh, sorry for the repetition. I've explained it so many times, but just in a sentence, it's based upon getting into private companies before they come public, but it's not working. It's not going well at all. And I I show them together because I I I consider the psyche, the mentality, the optimism about anthropic, open AAI, Stripe, Data Bricks, all wrapped up in the same realm as SpaceX. But SpaceX got out at the right time. They struck when the iron was hot. And uh Enthropic has made no secret about the desire to go public next month. And I don't know anybody besides myself who's basically said, "Watch them scuttle it. Watch them scuttle it." Um, that will be that will be a seinal moment if that happens. Not permanently, like we're never going to go public, but just like, you know, until market conditions permit, some excuse. So, November's coming. We'll see. Um, here are some individual shorts I've got in the few minutes we've got left. Let me just sum through them. in pretty much alphabetical order. Um, as always, the red line is where my stop is, and in some cases, the stop is quite tight at this point. So, we've got applied opto electronics, uh AXT um, I, which, uh, is actually green today, but the stop's right there. It's been good so far, but, uh, these gaps are very helpful. Just drag that horizontal down to a tighter stop. Um, Caterpillar. Um, truth time. This is one I'm not short. I just wanted to include it because it's done really, really well. Uh, it's fallen from 1072 down to like 771. That's a lot. That's like 30% or something. This is Caterpillar. This is a huge ancient organization. And uh, you know, the hyperscaler effect is definitely being felt there. Um, those who bought puts when it was at like 1060, God bless them because this thing I think it's I think it could go to $450. Um ultimately um, that was a typo. Corning GLW um, continue to be short this breaking down nicely and a lot of green bars here. They may be down on the day, but a lot a lot of weak opens and and strong current prices because, you know, there has been buying going on. um synopsis. This uh tightened up the stop like so and applied materials of course semiconductor related. And this one's an odd one. It's trading near the lows of the day. So it it opened sort of strong and it's trading weak right now. So that that's that's a standout. It's a little unusual today to see that uh credo technology. And you know, I'll just take a moment before I zoom in. Um, you can see the tremendous distance between present price levels and principal support. And so that's one advantage of just plain old boring short positions as opposed to an option. I don't care about [clears throat] expiration. You know, if it takes half a year to get there, that's okay. Um, the borrow rate on these is usually pretty tiny. Um in fact the only like KU is you know like 10% or something but on the whole it's really negligible way less than margin interest. Um Echoar is also down nicely like so and also trading near the lows of the day interestingly enough. Um Ion Q I've been mentioning quantum lately. In fact I think they kind of labeled yesterday's YouTube video as being all about quantum. Um, I had been short at least three positions. I'm still short ion, so I've tightened up the stop to today's high. And um, I don't think I'm showing Qbit, but as I mentioned, I I covered that one. Uh, Micron, I I made mention of finally jumping in a few days ago and shorting Micron. as strong as it is and this has this was only 8 n trading days ago um around 1100 it was not far from lifetime highs but recently it started to to to stop being the exception because a lot of semiconductor stocks were getting hammered whereas AMD Micron they just put their fist on their hips and they weren't budging well they're starting to budge lately and even they are beginning to succumb to this weakness And so this is down almost $50 today. So that's another short um Planet Labs. Um and this [clears throat] is a fine example of even if a stock has lost most of its value, it still has value and value that can be erased. So this has moved from 50 to 15 approximately. So it's about a 70% price drop and I'm short. And we've got a nice new gap today. And it's also completed um very nicely formed pattern. Everything above that dash red line. Another quantum one uh D-Wave QBTS. This is down um about 3%. And we are getting in the vicinity of this blue line. We've broken the red line. We're starting to tease the blue line a bit which is simply anchored to this major price gap right here. Um, you know, this this had been after it IPO just a horrible stock. Went from like 13 down to pennies. Then it went up to about $45 and now it's down in the the low teens again barely. But, uh, we'll see if that can sustain. Um, if if we do get a tech rally for some reason, I know that Quantum will probably rally much stronger than the others because it's been so so beaten. And that's one of the reasons that I went ahead and uh trimmed these a little but also got out of QUBt completely. Uh storage stocks have also been participating in the downside. Um we've got Seagate here, STX, which is down almost $20. And I said earlier how this is, I think, the beginning of something bigger. This is kind of the poster child for that idea because we are getting very close to completing this just dynamite top that that spans many many months all the way back to April. So this about a half year wide and the stop on this is clean as can be which is yesterday's low. So, as long as you don't violate yesterday's low, I remain in this position. And the perfect outcome for this would be that sounds, you know, like a truism like for it to go down tomorrow. But there's more to it than that because that affirms that it's respecting that resistance. And more importantly, if we can get below today's low, that's a very big deal and opens up the prospect of move all the way down to this major price gap. So, that's worth watching. closely. I'm kind of satellite crazy these days. Here's yet another one. Vioat. This is the symmetric triangle I pointed out. I mentioned it yesterday is violating its symmetric triangle, breaking below it and closing below it. And so we're at a new multi-month low here on this today. And one more storage uh stock relatedly um WDC, Western Digital, which itself is down about 3%. Um and as with STX, opened weak and is trading strong right now. And I've got a stop set right along there. So, you know, by and large, I mean, we're down half a point on the ES right now. And yesterday was like my best trade of the year. Today is a good day. Not the best, but a good strong day with a rotten ES move like that. And that's why it's exhilarating because there will come a day the ES is down 70 points. And God knows how hard these tech stocks get beaten up. So, I I'm excited by it. Uh, so just to wrap things up, um, Jeral asked earlier today about banks. I don't chart them. They're boring. They're basically an arm of the government. They'll never go down. Uh, XLF, I'll just mention in passing that it's kind of interesting that it's broken this trend line. Um, these tops in quotes never seem to follow through very well. Um, and we did push up against this one and are reversing away from it. I don't know. I mean, if more banks come out and it start it gets weaker and weaker, nice. You know, it could help. Um, but the last kind of honest market move was this right here, which uh, you know, the government's just like never again. That's when we move from like 21 down to $3. So, that was the last really organic expression of bank value. But, uh, it's all about the CPI at this point. So, there's the ZB. There's bonds strong today. They could go flying tomorrow for for all I know. But uh um bottom line, another good day, more lightly positioned. And if we get another good one tomorrow, I'm going to go get him again. So I'll see you then. Thanks for coming by. Take care.