Chapters
00:00 Intro & Wildfire Smoke
01:53 Small-Cap Growth vs. Value: The Risk Signal
04:18 SK Hynix's IPO & the Space Names
10:16 Using ABCD Legs to Buy Bottoms
13:52 $PLTR: D Points & the 160 Ceiling
18:36 $ARKG Back to Its 2022 High
20:50 Watchlist: $PTCT, Software, $IGV & $CIBR
25:29 Tracking Intermarket Ratios
27:53 Consumer Staples, Rates & a 2022 Redo?
33:16 Chip Splits & $IWO vs. $IWN
36:44 $NFLX Into Earnings & StockTwits as a Journal
42:44 SPY Parallel Channels: A 700 Pullback?
47:26 Harmonic Patterns & the Golden Ratio
55:52 QQQs Timing & the $SOXX Neckline
Market Hours #189 went out live on Thursday, July 16, as a guest show: Nick hosted, joined by T.Stonk (Jason) and Aaron of The Rotation Report, while Ben and GP were off. With wildfire smoke hanging over Michigan and Minnesota, the group covered a small-cap growth-versus-value signal flashing caution since mid-May, the space names and SK Hynix's rough IPO, how to use ABCD legs, Palantir's 160 ceiling, consumer staples and rates, Netflix into earnings, and a long conversation about harmonic patterns, the golden ratio and timing.
Nick's setups, levels and trades
Nick said that in hindsight, anyone long the space names into the SpaceX IPO should at least have been trail-stopping and selling in tranches. He still believes the QQQs will drop the floor of their range, the way they did out of the last one, and that it will act as a rubber band. Going into earnings season, the bullish tell he wants is the Mag names getting hit after earnings and bought back up fast. He admitted he finds holding swing shorts very hard. His approach has been to size up on a day trade and carry part of it if it works, but the launch-day bounce stopped him out of SanDisk, ASTS and Rocket Lab shorts. On SK Hynix's new US listing, he said he wouldn't know where to enter outside a day trade, but its roughly 30-point range from about 160 points toward the 130s. He doesn't see a reason to catch a knife in the space names unless you're already a long-term holder, and thinks the 30s are possible for Rocket Lab.
On ABCD legs, a pattern StockTwits veteran Trader Florida built his teaching around, he described two uses. A long-term investor can use the completion of the CD leg — often at the 200-day or a prior resistance level — as a bottoming area. The other way is to set an alert there, wait for the first ABCD leg up, and buy through the first pivot high so you have confirmation and "the wind at your back." On Palantir, if you were long from the lows and added through 138–140, the D point sat right at 160, and what he really wanted was a breakout and reclaim of 160 to put it in a 160–200 range. A Fibonacci extension of the AB leg puts the measured move near 200. Flip it around: a bear who thinks measured moves pause or reverse would look to short around the 156 D point. He's neither bullish nor bearish on Palantir — he thinks it's acting as a spring but is at the mercy of the market.
He liked the IGV because its undercut of the low came without the awesome oscillator or volume confirming, followed by a series of three-week tight patterns. On CIBR, he could see a shakeout to 84–85 after a failed breakout before it bounces. On Netflix, it was into the 200-week and had spiked the 75 low going into earnings that night. He likes that they hadn't pushed it lower yet, but wouldn't trade it ahead of earnings and wouldn't be surprised to see 50–60 if they really wanted to smoke it. He said StockTwits works for him as a journal that keeps him from overtrading, and that the angry replies when he posted a possible Rocket Lab ABCD leg were a signal in themselves.
He credited Cookie with helping him catch the move off the March–April lows. He believes every stock has its own personality: Google's "golden number" is roughly 65 points per expansion, and the QQQs tend to consolidate after each 18–20% run. He flipped Cookie's pattern around and uses it to mark inflection points in time, not just price. His read on the QQQs: after the last roughly 70-week consolidation dropped the floor and ripped, he expects a much shorter range that drops the floor and snaps. A pullback would look fine as long as the 200-day and 30-week hold. If they break out instead, he'd look to take a lot off around November, at that point in time rather than at a price. On the SOXX, a long trade comes on a reclaim of the 540–545 neckline, the short-side measured move is about 445–450, and a long-term DCA investor could start around 450, when the 200-day has likely caught up. He thinks larger pattern build-outs are more reliable on higher time frames and higher-priced stocks — "trends with no friends."
Guest setups: T.Stonk and The Rotation Report
Aaron explained the small-cap growth-to-value ratio (IWO versus IWN) that he and his team track among about a thousand intermarket relationships. Small-cap growth is profitless growth, while small-cap value is more like regional banks, so a rising ratio means risk-on and a stalling one means be careful. It had been flashing caution since just after mid-May, and it mattered more after the SpaceX IPO. He compared it to 2021, when the ratio rolled over during the SPAC mania while big growth names held up for most of the year before breadth melted. He was also watching consumer staples. The XLP was coiled tight, and staples had performed about the same as the S&P since the October high, with a fake breakdown that refused to break down again — "why would consumer staples ever outperform the S&P? It's not for good reasons." A guest also noted that on the JPMorgan earnings call, management said its data doesn't support the K-shaped-economy story, which they saw as a possible opportunity in consumer names. Aaron raised the concern that a rate scare or hot inflation print could come this quarter into the fall rather than in 2027.
T.Stonk said he treats the space names as stuck in "IPO hell" and would either DCA very slowly for the long term or trade the ranges inside what should become big bases. A guest expected sharp snapbacks — Nebius could easily bounce to fill its gap in the 240s–250s before another leg lower — but said a snapback isn't a buy signal. On the watch list: PTCT, which trends well on the monthly as long as it holds about 88, and software names consolidating above rising moving averages under resistance, which they'd take "over the knives out there right now." CrowdStrike is the best in breed and "last man standing," and they're still holding RBRK. They also flagged ARKG pushing into its August 2022 high around 43, a possible big cup-and-handle. On DXYZ, one guest said they were long from about 33 and that the main reason to own it was access to SpaceX, which now trades on its own.
Using an indicator to flag them, one guest uses harmonic patterns as confluence rather than a reason to buy; XLE reversed right at a completed Gartley pattern a couple of weeks earlier. They showed a weekly SPY chart of parallel pullback channels from the staircase higher, pointing to about 700, then the 680s, if the market rolls — a way to stay patient on timing. They also showed an ASTS channel drawn two years earlier that price was testing. On semis, one guest sketched an idea where a fake head-and-shoulders blows out the shorts before a real roll. They said they've never seen so much focus on the 50-day in tech: the SOXX was within about 1% of its average price from the March low, a possible springboard. Their takeaway: treat the market like a casino, take a lot of singles, and don't get emotionally invested, because "the patterns are bait." The fewer people watching a pattern, the better it tends to work.
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