How To Trade The Infrastructure Bill

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Episode Summary:

• Dont be short infrastructure stocks
• Will Elon Musk sell 10% of his Tesla stake?
• Cannabis stocks rip higher

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Guests:

Tim Quast, Founder/CEO, ModernIR and Market Structure Edge 36:00

Twitter: https://twitter.com/_timquast

Meet The Hosts:

Dennis Dick

Twitter:https://twitter.com/TripleDTrader

Spencer Israel

Twitter: https://twitter.com/sjisrael

Joel Elconin

Twitter: https://twitter.com/Spus

https://www.premarketprep.com/

Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.

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Unedited Transcript:

Good morning, everybody happy Monday. Hope you all had a great productive, relaxing, enjoyable weekend. Mine was stressful, but that's okay. We are back in the saddle. It's Monday morning. Let's get this show on the road

coming to you live from downtown Detroit. This has been zingers pre-market prep with your host Joel Kahn. And this is a vowel tile puppy here. Isn't it. And Dennis Dick I've been the petty. I will buy the stock per pen. Everything that you need to start your trading day

good morning. Good morning. Good morning. As I said, welcome to pre-market a prep, Spencer Israel, there's joy, Alcon, and Dennis, Nick is here as well, lurking in the background. And as he's wanting to do, he'll be on in just a second. We got a lot to discuss, and then we'll recap what happened on Friday over the weekend.

Last night, this morning, we got to talk about the infrastructure. Bill is probably going to be the story of the day, how to trade that. Yes, we will also talk about Tesla. Elon Musk is acting strange on Twitter again. So we have to thought about that. That's the law. We will take questions from our chat. We will take questions from Tim Quast or we will ask them questions at 8 35.

He is from market structure edge, also the sponsor of today's show. So we got a lot to get to Joel. Good morning. I see your charts. We'll get it up on the screen. How was your. Ah, very good. Welcome in everyone. This Monday version of pre-market prep, 8:02 AM and the spoos are our grain. We're up to 75 and 46 93.

I tried to test the low from Friday off the open, but caught a bed. Uh, our number focused number of the day 90 and a quarter. That's our all-time closing high. We've had seven higher highs, seven higher lows and seven old time. Closing highs is what a remarkable feat. Let's hope that continues today. Our crude is in the green by 60 cents and 81 87 to start recovering from that dip under 80 gold clear as 1800 up to 80 at 18 19 70 silver.

It's going the same way. That's up 18 cents, a 24 34 Bitcoin catches a bid. Let's see, not a new all-time high yet on the rolling futures, but rock almost 5,100 bucks is 66,500 and Ethereum futures. They're up $276 and 75 cents and 48 0 7 triple D. Uh, when are you coming over for lunch? Like when are you coming to visit.

And M and a, the borders are open. You tell me the borders are open. Orders are open. And I mentioned on that pre pre-market show with Emily, I had a gig of a photograph of someone that hasn't seen their husband in two years, keigo, Harvard. She was supposed to be there at 1:00 AM and the person got there at 3:00 AM or three 30.

So I imagined that border man and the person just fly over because I've got a, one of my good friends, my own, and my good friends got married during COVID. You can fly over the border. So, I mean, it's not like you can't to see your husband. They just got to fly and not drive over the borders. I don't think no, I don't think so.

A hundred percent, my buddy flies over every three weeks to see his wife. Yeah, he got married during COVID. You can fly over. I have another friend who, same thing it's wrong. Like, I mean, you can like, obviously you can't drive over the borders, but you've been able to fly over the borders for a long time.

So it's no problems to fly over the borders to see your wife, but you cannot drive over the borders. So I don't know, maybe it wasn't excused by that person, but. So that, that was the goal. That was the work around in the last year. You could fly. So if I want to go out for lunch with you, Joel, I could have flew, literally gone in the Windsor, you know, airplane flown straight up into the sky.

Maybe landed, try. I don't know if they have one of those or not, but to go the five miles across the border, but yeah, you could fly across. What's the nearest airport for you now? Toronto? Yeah, the bay major Toronto. Alright, so what do you got going on here? Weak, weak, overnight rocked. Don't be short infrastructure stocks.

That's the tip of the day, huh? So today you don't want to be on the wrong side of the infrastructure trade. I am on the wrong side of the infrastructure tray, but that's what my overnight portfolio. So, you know, you'll work out of that stuff. Sometimes it works out. Sometimes it doesn't, that's a little bit of the name of the game on any given day.

It's a lot of luck involved in trading. So we have a bill, it looks like it was passed late Friday. I don't believe it's been actually signed by the president yet, but that's, that's frankly a formality at this point. So we're going to get $1.2 trillion injected eventually into all sorts of things. And here is what is in place so far today.

Steel we'll start with steel stocks, right? Take her ex ticker, C L F you know them by now new core steel is in play today. Uh, there's a lot of money going towards just broad. Um, I'm not sure what you would call it. Just broad base, just roads and bridges and things like that. Upgrading, upgrading all that right.

Transportation infrastructure. Um, Evie stocks are in play today. Forget what's going on with Tesla, but Evie stocks are going gonna play today. There is a bad seven and a half billion dollars in the, uh, in the bill, uh, allocated for, uh, electrifying school buses, uh, and creating, or actually there's another center that building for EVs charging stations.

So ticker is Evie geo ticker, C H T actually. EVG L also had another headline today. So it's up for two reasons, but, uh, EVs stocks, charging stations in play today. Um, what else do we have? We have a broadband broadband upgrade. So internet infrastructure is in play today. Um, you've got transit and rail. So rail railroads in play today, basically every infrastructure, right?

Stock is in play today because buy in play meaning where it's strong today. Not because sometimes they say in play, meaning takeover, not takeover, not takeover, but yeah. So strong, very strong. So you can see Evie go right. There is probably your strongest, but there you go. I mean, there's so many stocks.

It's like rotation station here, and there's a lot of stocks. I mean, that's the PZ luck in their flat. Well, Tesla's not helping that, which we'll get to in a few minutes, but you know, there's a number of stocks that are actually trading lower here today. Some of your tech stocks are actually not participating here at the bank, mega tech.

Uh, but some of the smaller ones are not, but then you come in the lock and you're like, okay, well, what's really the driver here today. What is moving up here today? And it is all those infrastructure stocks that Spencer just mentioned. I mean, you've got U us steel X trading up four and a half percent. We got a new core.

I still have new Chrome, my longterm portfolio up 4.4%. CLF I did not rebuy it. I was hoping to get 22. I might've missed it. I actually got there twice. I should elect 22 0 9 22 0 9. Even some of the show, it gets down to like 22. I'm going to buy it. It would have been the buy. Now it's up at 2350. So I want to re get my Cleveland cliffs.

I'm not sure I'm chasing it up 5% here today, but then he can go into the construction stocks. He'd go to like bulk and materials VMC it's up 13.7%. It's a huge move for Vulcan Martin Marietta MLMs up 25 points here this morning. You're seeing, you know, uria is another one, obviously equipment rental up 20 points here this morning.

So this is a massive. Massive moves off this and John Deere, John Deere, John, Deere's getting a lift here. I mean, obviously the cat's getting a lift here, full sculpture. I got an overnight position in caterpillar. Um, there's just a ton of stocks that are, you know, getting a lift here, uh, from the infrastructure bill.

So I don't know. So what do you do? You're on your stocks here? Is this a ring, the register opportunity or is this, um, you know, a chase and they're going to go higher type of trade? I I'm, I'm not sure. I mean, it's a big, big, overnight move. And if I, and I, I never chase, you know, that I don't chase stocks, so if I'm not in it, I missed it.

I missed it. But now I would be looking at maybe some of these stocks on pullbacks maybe to get in, but if you're in them and you all of a sudden get a seven, 8%, you know, in the case of like, uh, VMC trading up 7% and the pre-market like, this is a huge. Move for a stock, like, think about this move in the last month, it's moved 25 bucks, but I mean, really this thing's been stuck in a trading range.

These aren't stocks that typically go up 7% overnight and boom, you've got Vulcan materials up 7% here overnight. Is it a ring, the registrar opportunity, but then you got a stock that's making a new high. So I don't like to sell stocks, making new highs, cause new highs, but get newer highs. So I think you're buying pullbacks as opposed to, you know, just, you know, selling it short here and I don't short rocket ship, so I probably wouldn't be doing that at all.

I dunno. How are you playing at Joe? And you got to look it on a case by case basis and you can't. I mean, if you have a target, you know, involved in metals, they dot 2 0 9 89. Maybe take half off, you know, and see how it reacts off the open it's up almost $14 on 4,000. I mean, this is a company that missed earnings last week.

Not a kid, not joking. They missed earnings last week, VMC on Thursday, they reported a buck, 54 bucks, 66, a stock traded down on that report and then they turned it around and they kind of turned it around the next day to rip roar and rally, not thing to do with the individual companies fund, but didn't do what the infrastructure bell.

So people speculating obvious. It's gonna be a lot more construction going on here. Now that we've got this infrastructure bill finally passed, but as a, too much too fast, For this one with, uh, you know, the green, you know, it ended up to be a green candle on Thursday and then, you know, Friday and make that new all-time high.

And then you back off, you know, you're up 14 bucks for this one. I'd be a little bit more inclined, you know, to perhaps during the register, if you got caught in that, in that, uh, in that onslaught on Fridays. So, uh, acts is acts, you know, it, it's a good level sock and it will go find his level right now.

I'd be thinking, can this get to 20? Right. It failed at 27, a few days ago, twice. Now that 27 is going to be support and there's just like two, three highs in the upper 28 handle. Uh, what are the other heavily, uh, Cleveland cliffs coming off that low? That's been the lagger to the group. Yeah. 20. And see, I'd be more inclined to wait, you know, to come back into 23, he had three tops in the 23 area.

Maybe get some profit taking and come back down to 23, nothing on the dailies until 24, 36. That's a five day high that. So thinking about it here, if you look at all these charts on the daily or the weekly, rather than even the monthly, right? And like every time, every time they, they were out of favor, it was always related to the bills, hung up.

It's stocks not going to get through. Well, now we actually got the EV every pop was on the speculation. That we could get a bill and every drop was on. Oh, we're stuck through the, stuck in the pipes again. Um, the other word I did see I'm on Dennis side on this one. It just seems like it's past, it's not past this past.

It's not past, you know it, right. I mean, it's this already been, you know, as it's been baked in the market, obviously not because these stocks are getting, uh, a good reaction. The only thing I'll do that, that will kind of the only potential negative here. We're really not going to find out on Tuesday cause it's going to take a while, but we got, got October PPI on Tuesday and CPI on Wednesday.

So throwing all this money into the economy, if you guys are worried about inflation, which a lot of people are, this is definitely going to have an inflationary effect that. A little bit of an overreaction on some of these stocks. So to just give them, you know, six, 7% overnight, even on the steel stocks, which I'm long, a couple of them, obviously, I feel like it's a bit of an overreaction.

Do they even URI? I mean, it's up 20 points sped up 22 points here right now. Holy, this is a huge move for a stock. That's moved 20 points. Like, I mean, it was stuck in a range of 20 point range for two and a half months. Now you get like 20 points overnight. I think it's a windfall. I think if you're long, I think you're still, when you get these ridiculous pops on, on the news like this, I think it is a ring, the register opportunity and maybe get back in and scalp your way back in.

But I guess it depends on your timeframe. It depends why you're in the stock. You know, it depends, you know, on a short term trader swing trader longterm trader your short term trader swing trader again, these five, six, 7% pops. I think you take the gains, you have a longterm investor in them, you know, like I am a new core.

You probably just holding on, you know, I still think there's Lino a path of least resistance on a lot of these stocks is probably still higher and just a general rule of thumb, you know, do you get filed through, through the pre-market high? Do you hold the pre-market high? Do you have a big candle after the open where, you know, you take out that pre-market high and you come back down through it also, you know, are there any levels there with, you know, some of these stocks are just in no man's land, right?

So, and you can't say, oh, this is the former old time, high or old time closing. I, I think you just gotta look at your pre-market highs. See if he can get the file through and then play the court. So in also thinking about is, you know, a lot of these charts look different, right? Like Martin Marietta looks way different for sure than, uh, Cleveland cliffs or bad example.

Um, what kind of does us steel, right. Or us deal, right. Or, or caterpillar, right. Or a caterpillar. That's a better example. So when you say, oh yeah. Is it priced in, is it coming too far? Maybe on a MLM maybe. Sure. Right. But on a caterpillar now, probably not. And remember, one thing to consider overall here is, you know, okay, we get an infrastructure bill and that's going to help you with government spending public spending.

But what about the private industry here? The private industry is still looking. I've got a friend, the quotes, huge projects. I think I told this story already. He quotes huge projects. And when I'm in Ontario, um, so he was quoting and that's what he does. He's an estimator. So he goes on and he quotes out these huge jobs and, and he had, um, this one job where he'd quartered it out bef like why like last year and it was 450 million.

The new quote on that same job is 675 now. So you gotta wonder with the increased cost of materials across the board and labor across the board. Is there going to be a few projects that gets shared. Is there going to be a few people that say, okay, well it made sense that 500 million, 550 million do this expansion doesn't make sense at $675 million.

So we're just going to shelve that project. I think you are going to see some of that. You're definitely seeing it in the retail, like housing, you know, the home builders to a certain extent, you're going to start to see that because it just doesn't make sense, you know, to be paying, you know, 20, 30% more than you were paying last year.

So material costs, labor costs are going to be one consideration that yes, we get boom, a huge amount of public spending that comes in to a lot of these companies. But the private industry is probably not going to be spending as much as it would if prices hadn't escalated as much as they have. So I think you've got to think about, uh, I don't know if you can say commercial, commercial construction.

Uh, I don't, I don't think he told me, but he does all kinds of commercials right now. I would say, uh, you know, building office buildings right now. I think he got, uh, you know, maybe let things shake out. Well, yeah, I don't think there's a lot of that going on, but the commercial construction is still going on, but again, it's all, you know, put your CFA hat and you go to cashflow analysis, you know, what are you putting in?

What are you taking out? It throws out when you're seeing 25, 30% hikes. And that's what we're looking at year over year. And a lot of areas is construction costs, pre COVID construction costs, post COVID in a lot of areas. And it goes right along with the housing market too. But a lot of different areas, there's up 25 to 30%.

So, you know, we haven't seen inflation. Like I was saying that same guy has been doing this job for 20 years. He said, I've never seen price inflation. Like this he's like I've never seen in my 20 year career, you know, usually year over year, you'll see a two, 3% increase. That's 30% increase in the prices of projects that will turn people off.

Just like my one friend that builds houses and he does decking and stuff. And he was saying, I don't get any calls on. And when the lumber was high and he's getting calls now, cause lumber prices have come back down. It was, the lumber is high. It's like I usually get like 25 calls in the spring to build a deck.

He's like, I didn't get one last spring, nobody building it. I was going to build a deck on my one other piece of property. Like I'm not going to pay $10 for a two by four. Now that the prices of lumber have come back down and the lumber has come back down significantly. Um, you know, some of that, those projects will get picked back up, but there's other, you know, construction costs.

Like we talked about electrical, we've talked about, you know, different things. This is a major consideration. So a lot of these other companies, you know, we're talking, you know, when you know, Vulcan and that these are construction material, suppliers, materials are still escalated in price and that will shelve some projects.

So yes, the infrastructure builds going on. Going to get that public money feeding in, but there's some private industry that's not going to help. So I don't know if I love all these companies going for, what was that one he stocked at? Mark mentioned a while ago that they do the wiring or they sell the copper wires to cast.

Remember that? I never wrote it down from one to check on that and I bet you that's gotta be ripping. Uh, but you're right. I mean, it, it, you, you don't, but you budget 475 million comes in at 6 75, either the commercial project, either a you're scaling it down. Or be you're, you're postponing it or Kate you're some cases and some cases and that's, and that's the private industry.

Now, the public industry has money. They're still going to do projects, but it's limited to, I mean, the public industry is somewhat limited, so yeah, we're going to throw a trillion dollars into infrastructure. It's awesome and everything, but the question is as the private industry going to be backing off.

Cause I don't think you get as much as, as you would. If construction costs had an escalate, as much as they. So, and again, we were in this environment where people were staying at home and they were doing stuff and, you know, they were happy. And obviously I don't wanna confuse commercial construction with, you know, residential construction, but people were spending money on their homes, sitting at home.

I think the Chad's got your back here. I think it's a T K R O. Yeah. It's not a chicken plant. Yes. Yes. It was a chicken guy. He knows a few things. These guys are unbelievable. These cute shot is awesome.

Wow. That's what they must write it down. That's what we need to write more things down. I need to write more things down. All right. Moving to, so it's lots of different plays. The question is, you know, are you chasing these docks of five, 600% today? I don't think you are. So, but I, to me, I don't chase stocks, so I'm never chasing stuff up six, 7%.

All right. So I, I disconnected a little bit over the weekend cause I was busy doing some stuff. Uh, but I was not able to avoid the story of the weekend, uh, which was this tweet from Elon Musk Saturday afternoon. Unreal. Um, I'll just bring it up on the screen here. There it is. Um, should I sell 10% of my Tesla stock?

Yes or no. Oh. And I will buy by the results of this poll, whichever way it goes is ridiculous. So 57.9% of the 3.5 million people say, yeah, you should sell 10% of your Tesla shares the rest. Say no. Um, what does this mean? I don't know. I think you want an, I used to sell some of these docs, probably all want an excuse to sell some of the stock.

He knows how many Tesla haters are out there. So maybe thinking, oh yeah, for sure. They're going to say Selah now I have an excuse to sell it. And I have an excuse to book some of the gains when the stock price has just absolutely nosebleed ridiculous levels. So it gave them an awesome excuse. So it's down 53 points today.

It would've been, and you could say more Spencer because with the infrastructure bill getting passed, it would have been up to that. Am I correct in thinking that? Yeah, so, I mean, it's probably not even a 53 point knocked out. It's probably like an 80 point knock down because it probably would have been up 20 or 30 bucks if Musk wouldn't have tweeted that.

So down 54 points, obviously from the close on Friday, this is mosque at as best as adept get bought. Doesn't the DePaul Tesla doesn't always get bought into. I mean, the probably gets bought again, people obviously trying to get ahead and say, well, it's going to come in and dump 10% of the stock, a lot of stocks going to come in for sale, but that's why they're selling here this morning.

But there's a lot of people that are in this, but that being said that the dip just always seems to get bought in Tesla. Am I sticking the longterm portfolio? Hell no, but nice range. What's below. They came in at 4:00 AM in the morning. I mean, I wasn't up, I know you were at up, but if you're short, you see that news over the weekend, you take it.

You've been getting pounded on you're short. You get up at 4:00 AM on this car news. I mean, uh, hit, uh, 11 30, 50 in the second bracket, the second 15 minute bracket. So there couple lows, right, right. Right in that area too. So didn't even get to this, uh, I believe this was an 11, 18, low 11, 19 Val on the upside right now.

Uh, seven 11 is called 1180. That's kind of where you're stalled up there. So if we take out 1180 is another 14 bucks and logically you just have to think about the bottom of Friday's range, net 1208 number comes in. That was the former old time closing high for a few days ago. Obviously you made quick work in that, uh, uh, on third.

Let's see, that would be Wednesday and Thursday. Obviously we get to the bottom of yesterday's range, 1208. Yeah. Just as a chat's noting, uh, you know, got some options and he's got a tax bill due of, you know, approximately $15 billion on, on about $28 billion worth of gains. Um, and so if he takes that game, He doesn't he or he has been taking, he he's already taken the game.

Uh, well, well know it, you know, it sounds to me like he doesn't have pay any tax. It didn't take any of the gains. It doesn't pay himself a salary. This is what he was tweeting. I don't follow his personal trading or his personal finances, but that's what he was tweeting. I wouldn't, my, my guess is this a guy like him is probably already selling.

Right. And we'll find out eventually. Right. Because it'll all be disclosing that how's he sold any stock. I never see an sec filing with Musk selling stock though. Never see one go by as he sold. Does he sell. How's he survive. If he doesn't sell stuff, he doesn't take a salary. Now. It's not like he wasn't already rich.

Right? Well, I guess he must've sold some tests of stock along the way, but I have not seen, like I watched those sec filings very closely. You can get them right through your Benzinga pro it's awesome. And I haven't seen it at a Musk filing, sell Tesla stock in years. I think he's probably not sold in years.

So, so he's got these options that expire next year. So he's going to exercise them, right. That would mean a $15 billion tax bill, which is what he's thinking about. I mean, he's probably already sorted a little bit, but we don't really know what I'll find out. Eventually you kind of do because he's got a file to sell.

So I don't honestly know the last time he sold stock. So it's impressive actually that he just hold, hold, hold, hold. Even when he talks against a stock, which he has done multiple times, going up, the guy doesn't sell stock, like you see, you see. Self Facebook once a week, man. I'm not joking. It's his filing hits.

It seems like once a week, sucker Berg sell on Facebook. That's a plan sell, right? Well, exactly but mosque, I don't think has those plans sells. She just doesn't like they just all in on his stock all the time. He got to give him credit for that. I mean, gates the gates foundation, he does the opposite. He borrows it.

He partly uses the stock as collateral, but I tell ya, like you see Zuckerberg once a week. Bayzos Salan stock. Obviously it's a forced to deal with. I mean, NEC gates, selling stock all the time, Microsoft, I mean, you see these guys selling stock all the time. I don't ever see my own stock. So you know what prompts the must for holding his promise to this guy?

This guy is so hated by so many people out there and yeah, he's, you know, trolling Twitter every once in a while, but I'll give you, you know, the guy has a word. The guy is a genius. The guy doesn't even sell his shares and he lives in a 400 or 500 square foot apartment. I mean, this guy is unbelievable. I give you a proxy lawn mosque, even if everybody else hates you.

And even if I don't think your stock's cheap and I don't put it in my long-term portfolio, you still, yes.

Joel is holding your, your cost basis is so low on tests that you can now never sell. Is that correct? Dad? I don't even look at it. Just got a tax pillar that will rival Elan's is Joel. Yeah, Joel's got these stocks is up a thousand percent in all these stocks and he can't sell either. He's stuck. They don't want to pay those taxes either.

Nobody wants to pay the tax bill. No one wants to pay the tax man, but you know, what would happen is Biden stares tax on the, on the unrealized gains, blew out would be a game

Dan is, come on. We both know, we all know that that's not going to happen. So. Well, we don't know anything with this administration, but we're not going to get political here. Nope. I'm just saying, I don't know anything so well, we all know nothing. So let's move on. We've talked Tesla, we've talked the infrastructure bell.

It looks like cannabis is the next thing. What I do now is that every cannabis stock spiked at the close, or just before the close on Friday night, I was like, I saw it and I thought, what the heck is going on? And then actually someone tweeted at me cause I didn't even, I wasn't looking very hard or anything.

And then I, and then, and then he tweeted, oh, the Republicans are affording with the idea of their own legalization bill for marijuana. They're not going to wait for the Democrats to do it. Well, the Democrats have already done it, but they're, they're going to introduce their own bill. So every kind of a stock and the ETF spiked on that at the close on Friday.

Wow. Um, give us a few examples here, because I'm looking at some of the Canadian ones and they didn't move at all. They actually went the opposite direction. So I guess they don't like the Canadian ones on there. I should have clarified. I went to grow generation two and I don't. I see it up this morning.

I don't see a big . Um, S M S O S is your ETF M S O S. You can see that athlete's up again this morning at 29 9. Right. Yeah. All your, your us ones that don't trade on. Exchanges. Those all spike too. I know you don't care about those, but you can care about MSLs. Um, you know, even the MJ spike a little bit, but it's, it's gotten what's more Canadian, so it's, it's not going to be as a move as big here, but the MSLs is sort of your big play here off this headline.

See these docs have been looking for a catalyst and it hasn't had one for a long time. So, you know, as opposed to some of these, uh, you know, steel, you know, they've been in, in pretty good uptrends this is the first day of a, uh, of a catalyst for I'll just go at mass. Oh. As you're bumping up at 29 50 right here.

Uh, that just is a daily high, but maybe you want to think about 30 bucks on this. Uh, that's the high going back to first. Yeah, real close. It looks like 29 and a half. It looks like a little bit of selling there, but I keep an eye on 30. The stocks had been in downtrends they're getting a catalyst. This is while they, you can say this is the second day.

Cause they moved on Friday. Uh, but definitely some room to the upside of each individual. Tilray we'll take a look at that. I love in box participant. Now it's a good, it's a good, a practice run. Um, I think to, to understand how the Canadian plays versus the U S plays, we'll move off a headline like this, right?

Because the Canadian companies where they all, they're not stupid, they all have deals to get into the U S that are contingent on legalization. The market clearly is not interested in that because if it was then until we're able to be higher, you know, kernels would be higher. CDC would be higher, but then they're all, they're all up, but they're not anywhere near as, uh, what the, the U S ones are.

So it's, it's an interesting practice run for what could happen every time we get another headline like this. So bill progressive passes through one house to the other, to the president's desk. You know, this is what could happen. The cannabis ones go up a little bit, us ones to go up a lot. Um, That's what's happening here today.

So unless it's bad. So, I mean, that made a new low earnings while they also had earnings on Friday, right? Again, we've hated these Canadian ones for a long, long time. I don't follow the U S off exchange ones there, but it's been absolutely the correct call to hate on these things for a long, long time. And they continue to, uh, be a valuation issue.

Now it's been a valuation issue for a long time. The buzz was hot. Story was hot. Yeah. Pod stocks taking over the world while it's, it's not hot anymore. And the valuations are nosebleeds. So that's why I've seen them come down substantially. Is there some diamonds in the rupture there always is, but overall you can bring them all up until Ray, same story, $65 back in February.

It's 10 bucks a CGC and you know, probably should have never been where they were in February. That was when everything shouldn't have been where it was. Um, have they come down enough where they're cheap enough to start nibbling in. I don't know the evaluations. Last time I looked we're still bleed. So G w G is that other ones come down substantially?

So what do we say? You know, what did I tweet? I tweeted this over the weekend. I believe you sell rips on stocks and down trends. You buy dips and stocks and up trends. These are stocks that are in clear down trends and you're getting reps on them. I be getting out. That's my opinion, just my opinion. Okay.

Before we get Tim on a, well, let's do one more. I wasn't sure if we're interested in this headline, maybe Dennis has, but I don't think I am Regeneron here. Uh, had a PR out this morning, their, uh, their phase three study of their COVID vaccine looks like it is wrapped up. And the data seemed like it was pretty good.

They said that their COVID vaccine reduces the risk of contracting COVID by 81.6%. Um, this is, this is the single, this is the single shot at. Uh, one, one single dose. Yes. Is what it is. So reg N did pop on the headline on the news. I wasn't sure how much we care, but maybe you care more than I, well, I think we care.

These things had a huge down moves because of Pfizer on Friday. And then all of a sudden, boom, now we get Regeneron and this move, there is, there is so much dumb money out here because I should have been, you know, paying more attention here. But at seven o'clock in the morning, dealing with my kids and doing a lot of different things.

This had got to $645 this morning on this headline. That's the stupidest spot. That's just being one of the stupidest moves that you can think about. Here's a stock. They whack it from 6 45 down to under five 90 on the Pfizer headline. They get one positive headline on, oh, we got a drug too. And they bring it all the way back.

Pre-market to get back all those losses plus on what a selling opportunity, what a buy the dip and sell the rip in one day. Cause we talked about, you know, Regeneron and some of these being an opportunity to buy them. During a, definitely it wasn't a continuing to leak, but, um, and Merck didn't really bounce back much either.

Although I tried to play it, but Regeneron absolutely. Um, got under 600 boom up 6 45. It's 6 22. Now it's kind of in the middle. So should it be up something on this? Probably whoever buys 6 45 this morning, though, wholly over, over. Three minutes and took off that four. I just got counseling. I was just going to say like cubits it right off that open and boom gap prints.

And I just, I started with the 15 minute, but I was just, uh, I just wanted to narrow it down just to show you, you know how that's a three minute there. So here's your first three minute bar, then it, then it peaked. And then you hopped in right into this area here to like everyone like that. Got stuck here.

I got, I'm getting my money back. Not a lot of volume traded, but, uh, Regeneron it's been prone to do that in the past. We'll see what happens during the regular session. I'd hate to, if I was logged in, I'd hate to see it. Test the clothes and go right on this session. Oh, Speiser holding up here too, which is surprise.

I would've thought they would've hit visor on this news. They did admit. A little bit it's down 15 cents only. I don't consider that really five bucks.

That's a gift up here. I honestly want to sell it out on my long-term account, but I'm averaging at $13 and I don't pay the tax. So that's the main reason I've had it for eight years in my long-term account. I'm like, well, I'm not going to sell it. I kind of want to though. So, um, unbelievable, um, that they didn't whack this thing and they, it didn't really give much back and try to give some back.

It didn't really give much back and now you get everybody gonna get one of these COVID drugs, you know, post COVID some, you know, it seems like there's a bunch more coming here to my question. Let's bring it over to Madrona. We have one minute before Tim here, I'm Madonna, at some point in time is going to be a bias.

Isn't it? Because it was 20, $30 before the COVID thing ever started. COVID thing is still worth some money to modern. It's not like it's a zero and, but it's the flu vaccines and the other stuff. And they're so smart of Madonna. I mean, it didn't make any sense of $497. Does it start to make sense in the low 200.

Question to the chat. Does Madonna start to make sense as a long-term again, you're trying to call a bottom, the stocks and a horrible under, you know, it's one of those stocks, maybe this, maybe we should bring Tim in so we can see the market structure. It's gotta be ugly on the stock. I would assume because the stock's been going straight down, but at a certain point in time, you got to the hundreds on Madonna.

Do you stick it in the longterm account? Is this a smart company? This is a good, I will bring Tim in on one second, but this is a good exercise looking at your monthly's and saying, okay, where possibly could this thing go. Right? And, uh, you know, 2 93 was that you're low on October. Well, it took it out. You look at your, your monthly is, I know you can get caught up in the dailies, but your July law was two 14.

I mean, that's the monthly's and then, you know, you came down to 10 96, I mean, missing a $500, 400, $302 stock missing it by five points. If you're so inclined to buy the monthly low, that's looking pretty good right now. But, uh, you know, now you're only down five bucks on this session. We'll see. But if you could get a couple more lows in this area, I'm just talking technically.

Cause I don't know if having a pipeline, I don't know, but it's just using, let, let your monthly's be on something like this, something that wild with all the news coming out, you know, go a little bit longer term. Don't try and drill down on a daily, just cause it's going to get right over on a stock like this.

Right. I should have called today's show. I don't want to sell cause they don't want to pay the tax bill. I lost it is 8 37 on a Monday, which means, you know what? It's time.

Oh, good structure Mondays with Tim Tim, how are we doing? It's good to see you guys. Uh, well, thank you another day older, uh, which I guess beats the alternative. Uh, so, uh, Dennis, it's funny that you're talking about the tax, um, impact and how that influences your thinking. Uh, w w my wife and I, because she spent 20 years in the energy business, have some MLPs, so master limited partnerships and energy, and it's the same drill as a Pfizer.

You, you look at it and think that the, the amount of taxes that you would pay to get out of that position are just, uh, just ridiculous, but, uh, averaged in the new cost basis is almost nothing. And a lot of people that have been buying stocks for the last, like, if you bought some stocks, you know, good stocks, 10, 15, 20 years ago, like I know a lot of you, their cost basis on apple is like three or four bucks.

Mine is 25, but you just think. Your, your cost based on this. I do. I realize this is only long-term account, but I'm like, do I really want to, you know, if your insights, you know, your, you know, your Roth or whatever, but if it's outside, I have a lot of money. I mean, I don't want to realize this tax gain and they give half the money away.

Almost exactly. It's a consideration for sure. Yes, it is. And I saw that you were talking, go ahead, Spencer. I think I was going to say, Hey. Yeah, let's uh, so, uh, for you fans of supply and demand, let's look at the supply and demand in Madrona. Cause it's I made some, it is very telling Joel, I think you said it must have horrible.

It was Dennis or Joel said, boy, it must be. And, uh, okay, well, you're right. It is so,

so, so once if you've never seen this before, uh, folks, this is, so this is market structure, edge.com. And you can do this too. Just you put your name and email in and, and no credit cards. You can look at this same data, you know, for 14 days, but here's what, here's what the data tells us. The top graph is demand versus price.

And the bottom graph is supplying short volume. And so when demand is falling and supply is rising, what will price generally do? Go down it's I mean, eighties ugly. It really is. And it's been, you know, the interesting thing is that for a period of time, Madonna was at the very top of our, we, we will, uh, top of our list here internally.

We will track how much time stocks spend at 10. So 10 out of 10 is the absolute top of the demand chart. And so if demand is very strong and supplies, constraint, price will continue to rise. And majority was there for a very long time. Uh, but it hasn't been, it's been spending more time below five than above it.

Very challenging. I may be, be much better to look at a stock like Arista networks, uh, that that's, you know, I'll give you the, it's a great contrast. So if you look at the burner and you look at, uh, Amy, Stock I traded last week and it's, uh, you know, it's just fabulous. So here's the difference. Notice this demand rising supply falling, what does that tend to produce rising prices?

And modern has got a long way to go if it, unless you have a, as, as you said, Dennis, unless you have a long-term note that was Joel to, uh, if you have a long-term perspective, fine, but why buy something that's likely to decline? We want to, I generally liked to buy stuff that that's likely to rise. That's my preference.

Yeah. Your system's very it's it's, it's not a it's, it's a momentum system. It almost feels like which is the momentum market, which is why probably works well in this type of market. We've been in a momentum market for a long time where the weak seem to get weaker, the strong seem to get stronger. At what point can you make money on the turns?

Like when a stock finally, you know, decides to stop going down and it looks like it's exhaust and salary exhaustion, and eventually, you know, you start to turn like, in the case of Moderna, what would it take for your assistant to turn around and say, Hey, this is, I was actually starting to look okay. Now demand rising and supply fault.

Right. And it's that simple if we, you know, if we back up and look at the time that, uh, I'm just going to back this up six months. So if you go back to, uh, Early may early may was a great time to buy Madonna because it had those very characteristics, surging, demand, falling supply. That is a very, very consistent characteristic of stocks that produce returns.

And, uh, you know, you, you can come with up with all the reasons in the world why you might like a stock or not liking stock. Uh, what it all comes down to is supply and demand. That's that's really it. And where did that stop? It really stopped here right in September when Madonna did not return to. That was the time to leave and go find something else.

Yes. It produced some more gains. And it was for the same reason, uh, the supplies falling demands rising. But we already know that the, you know, w I will say, this is, this is a product of passive money, passive asset allocation dollars. We'll spend a particular amount of time and stuff. And then it's going to have to reweight if that stuff goes up and you might as well go find something else like Qualcomm or Airbnb, you know, Airbnb, another, another great stock to look at from a, from a supply demand perspective.

It, it, you know, we, again, we could talk about the financial performance, the opportunities in that business, but that's not what causes stocks to go up and down. It's supply and demand. And here you go. So you have a surging demand side falling supply side that will produce rising prices. And when those things stop, then.

It's a, you know, it's a, it ain't over till it's over as Yogi Berra said, uh, that's really dating myself and for you youngsters, great New York, Yankees baseball player, catcher, uh, world war II. But, uh, you know, that's, that's what you want. If somebody was asking, if you could look at D whack, I don't even know if you have send you.

I'm not sure we do yet either. We'll take a look because it, so here's the, we load up. We, we buy data that will. Everything in the market. Right. But we won't populate edge until there are about 20 days of data. And I think we're, we're getting very close to that. Uh, so, so otherwise we D we can't, we can't calculate supply and demand without some, some historical data.

Yeah. Uh, one thing, uh, I would like to ask you about is last week we talked about, uh, well, maybe not with you, but we talked about on the, on our show, Dell and VMware, the spin-off happened last week and now it went into effect and now they're different companies. Can you look at those, those forests? And, and I'm just curious now that we're a couple of days out of that, of that event, how, how the market digested that, and I fully expected to be taken to task because I I've said a couple of things last week about Dell and VMware.

I said that probably Dell does not have the same opportunity that VMware does. And I don't mean immediately. This is a big deal. This was a, this was a, a $27 a share shift of value from VMware to Dell. So it's behave. Like a stock split. So Dell's price reset to about, uh, 56% of what it was before. So we could calculate that pretty, pretty close to where it would be.

Uh, but, uh, so, so here's Dell and you'd look at it and say, well, that's not great. That is it. And I'm not, I'm not saying that you should buy Dell, but once again, notice, uh, the demand side was very good before the deal, because everybody wanted that $27 of a cash distribution, but then you have falling demand, rising supply above the trend.

That's not, that's not great. So let's look at the VMware. I think VMware has a lot of, this is not a supply demand equation. This is where I would have an opinion. I would say the, my opinion about VMware, uh, which is now bottled by the way. And it's very rarely a one. Oh, that's very, I mean, if you have the demand side all the way to one from a 10, 10 to a one, like overnight.

Exactly. Right. And it did because all of that cash came out off of, uh, VMware's balance sheet and went to the Dell shareholders. But look at that, you know, so here we have demand at the floor supply falling that will produce gains ahead. And I think that VMware is a great, uh, potentially, uh, beautiful way for passive money to have exposure to the cloud.

Uh, now that that, uh, Michael Dell was no longer the controlling shareholder, he still owns 40% of it, uh, that creates a better opportunity for passive money to own it. So that's not a, that's not an, a. Uh, look at the way things work, but it's something to think about. If you have a longer. About the cloud.

If we could show my chart, uh, kind of interesting here, uh, you had three lows in the same area during the unwind and, uh, you came to that area. It was like a ballpark 1 24. And then you had three highs right in the same area, 1 36. So you got people ask about rain stocks, you got a nice range developing here.

You got some lows to lean on and Dennis, I'm gonna throw it to you. Do you think it was finally, you know, did this kind of, this action here? It's usually like a wild stock. You think it was finally like ARBs, like the final unwind? I mean, you know, I traded VMware Dell for a decade. I feel like a long time he got ran over one time.

Why was that there? I did. Why wasn't that? I don't remember what that was. They were talking about doing this spinoff, I think is what happened. I almost really got run over. You know, and I'm trying to remember all the logistics. I haven't played the VMware Dell in awhile, but yeah, it was mild. The spread was mild and they blew out and you put it on and then it blew out again.

And you're like, I can't, I don't know what the relationship was. And then it, like, I don't know what the number was, but when I had talked to you afterwards, it was like three or four times where you had covered at a big loss already. So yeah, it's a, it's a point where in Tim's making that point too, like the arbitrage of facts are greater than anything else.

And when you all of a sudden lose all those effects, now you have a real company here. And I think that's the point that Tim was trying to make here is, you know, it's it now doesn't have all those arbitrage effects in it. So it's going to move differently. And we can see that, you know, even in the last week, like look at the movement and VM-ware all of a sudden, it's like, it's a volatile stock.

As people try to reprice, what is this worth as a standalone. Yeah. And the, the looking at the short volume data, which you can do with edge, uh, it was, it was apparent to us and I should, you know, so, so, uh, full disclosure, both Dell and VMware, our customers about. Uh, data on the corporate side, they have been from for a very long time.

So we track this data for them, very closely heading into this transaction. Uh, but it was very apparent from the point that that transactions notion is not even confirmed. When that rumor hit the markets. Dell became the long side of the trade. VMware became the short side of the trade, and you could see that in the data, I'm looking at a year long chart for VMware and their short volume averages, 55%.

Well, it's very difficult for a price to rise. If more than half of the trading volume, every single day is borrowed is artificial supply. But now we've seen short volume dropped to. That is approaching what it was in December of 2020 when that story broke. So we are returned and that proceeded some nice gains from December to about March.

Uh, there were some pretty good gains in VMware, December, 2020 to March, 2012, right through the pandemic. Uh, but that means there was a distinct change occurring to your point, Joel, about, uh, the arbitrage play, the arbitrage play is over the long short trade in DIA in Dell VM, or is over. And I think that that opens the door for some very significant appreciation for.

Tim question in the chat. What you think about PayPal here? What the market structure sentiment says about PayPal goes down every day. It goes down every day. That's a dentist side of it, and then I'd like to buy it, but yeah, sure. Good. So, so, and, and once again, so for you veterans of the edge mob, you know, you don't want to, uh, by, by, uh, uh, falling demand, right?

That's I mean, that's the, that's the whole point of the deal. So here's, here's. The supply side isn't bad, but there's a point where the supply side will reflect a lack of interest. Uh, so let's look at supply and demand. This is just 30 days, but look at the amount of time that PayPal has spent above by it's free days, three 30.

It's horrible. So even though the supply side is, is, uh, it has fallen and it's only about, uh, it's, it's less than if that's, that's an ideal stock level, um, of a short line, but you look at this chart, this is why PayPal continues to go down. You can come up with all the reasons in the world, the story then, whatever, you know, but here, here it is the supply.

The supply demand equation is a Bismal and in less than, until it changes, unless those things can diverge, leave it alone. Tell us again, when you know, you see that, you know, change. So a lot of people are looking, I want to buy PayPal. I want to buy paper, same thing with Madonna and stock goes down every day.

You can't help yourself. You just want to buy it because it's getting cheaper. Um, you know, you think eventually it's going to turn it around. We want to get the timing right though. So what, at what point when we're using market structure edge, would you, what would you want to exactly see, and I know you can say in a supply demand exceeds supply, but on your numbers, like when would you want to strike?

Uh, so here's, here's a case in point. So if we look at, uh, uh, roughly let's call it mid August. So here demand rises and supply has fallen sharply below. That's a spot where you can take a chance. You can say it's, it's riskier than buying it above five, because you're saying I'm going to believe that demand is going to at least achieve equilibrium and maybe exceed supply.

Really. That's how I think of it. There was a 10 point scale and five is the fulcrum. And there's, if there's more demand that it's above five, there's less demand than it's below. So that was the only shot. And the moment that short volume shot up here to see this, uh, you should be out if that happens, just leave because it already is telling you that the supply demand equation will not support the price any longer.

And it's not been worth paying any attention to since then. So you would say, well, how, when would it, well, you could sit around waiting, but you might as well go trade something else. We find that. You know, we'll, we're very close. This was what I'm Spencer. I told you that I was going to share something new.

Well, within a month of just putting this in a portfolio for edge users, we'll just give you the stuff that in the last five days has this divergence and, and that's that it's, we've been testing this data for Mo we're to running it running test and data and saying, is there statistical validity to this?

And there is. So we're finding that the top 25 of those 23 of them make money consistently. So that tells us there's great, great statistical significance in that diversity. And if we can do that, then who cares about whatever else there is. Let's just trade that stuff. And, uh, uh, that's that's stuff like team, you know, if you look at team, which was in the top 25 in that list that produces gains, see this divergence, wherever that divergence occurs here, rising demand falling supply here demands at 10 supply falls.

The stock's going to surge when that breaks down, then you leave and here at Hassell ready? So see that short line was above trend demands at the top of the ceiling. Okay. Move on. We'll find the next thing. But that to me is more important than sitting in, waiting for PayPal to become a good stock. You can find more about, uh, Tim's platform.

Learn more about a demo at yourself. Go to market structure, edge.com. The link is up on the screen there at the bottom. That's also in the description. Tim Quoss joined us every Monday at this time, Mondays Tim pleasure, as always to. Okay. Let's do some real fast ticker time. So I just want to say real quick for your PayPal people.

If you're looking for a reference area here, you to have three lows in the same area, right? Let's just call it two twenty five. So if you think this is over done, you may be a to pay up a little bit. You got to keep an eye on that area, but what you need. Is for like D these are patient buyers, right. And they've been waiting it for it to come down to 2 25.

What you really need is like, are they going to step up to two 30? Like, I can't get any more to 25 down, you know, but I still want to own another 5 million shares, you know, do I wait? Do I stay? But you got three loads in the same area. The ranges have come down a little bit. Uh, you know, maybe if you get above 2 30, 2 and things kind of open up, but at least you got a reference point here.

I don't know if there's, is there anything on the monthly surround that area? Yeah. You got a monthly, you got your, your, your March low at 2 23 0 9. So you have a reference point whether it's going to hold well, we'll have to see in today's session, Steve Janney asked a while ago. He, he got his request in there early.

He said he asked thoughts on square after Friday's fall. Um, and is that thing a crazy stock too? Yeah. Yeah. I don't know, like you got to pay pal problem here too, that this Paris traders I've tried PayPal squirrel all the time. So when I see PayPal this week, it makes me not want to own square. PayPal starts to turn.

Maybe it turns it around, but you got to understand the relationship with PayPal and square, the same company. No, but there's ARBs out there that do trade them with each other. So I know square disappoint on earnings. And you know, obviously while they didn't even know if they disappointed the rally they'd hit it, then they rallied it.

Then they edit their, I guess they finally determined that they did disappoint, but don't discount the fact that the pressure that PayPal weakness will put on square because there are relationship-based traders that pair those two stocks up together. So I think until PayPal turns around, it's hard to just jump on the square banned.

Uh, they'll defect a technical set up here because you have distanced yourself from the low a little bit. So if you are trading up a buck 12, you do have the parallels it, uh, right around 2 31 to lean on 2 30, 1 to 32. So I'll be looking at it. It's not like that. The PayPal where, you know, you got you Def you know, for the time being, whether it was someone trying to get long or short, this has got a little bit more, you just kind of taking a stab after the big down day on.

Okay. Somebody was asking us really badly about lucid motors, LC I D a stock is up again. It's a monster. And I mean, these EVs and this is infrastructure too. So you've got obviously clean energy place here coming out of the infrastructure you're seeing, like I said, Tesla would be up if not, if it didn't get masked over the weekend, but you can go to all the players.

They're all trading up here this morning. Um, Lou said has just in, it's in monster mode here right now. Again, are we getting to a point where, you know, sell cellular peanuts while the circus is in town? Maybe, but the stock just broke out here again. So, you know, I like it. I like the breakout over the 41 60 high that we had just from four days ago.

Now we're trading 43 50. There could be room to 50 at a certain point in time. You got to say, okay, it was $25, 10 trading sessions ago. At what point in time do I ring the register? I think you're lightening up and. But to call the top on this, going to be difficult. And you know what, if you're in it, maybe you're just raising, you know, maybe just trailing up your stops.

Uh, someone's selling their peanuts at dot 44 19. That's uh, yeah, I don't know how many they have. Oh, look, I fault the peanut. There's some, there's some volume there. Whoa. This has changed the volume 4,419. So keep an eye on that. I don't have anything else, uh, on the, uh, on the dailies, but Hey, you take out 44 19.

You hold 44. You know why the heck not maybe look for 45, but at least

Joel, did you miss a daily gap at 43 94? Up to 50 32. I have to go farther back on my day and our gap trader accountable here. He likes that. Well, how's the, where's the gap. Look at it right there. It's been trying to fill it forever myths with the eyes. And we like to sit gaps eventually liked to fill.

Does this fill this gap? Yes. Mitch's money. Mitch is saying, yes, you, this bullish money. Mitch is still bullish lucid. Okay. And you get your orders out and uh, just make it safe. Make it 56 instead of 5,600. We've had a few requests for the dad. Joke of the day. I'm going to say no dad joke of the day. Unless we get to 500 of legs, we can do it, but it might take 30 seconds, but we can do just before you go to the Dodger, what about rebellion?

Is that coming out today or tomorrow, today, or tomorrow? I could have sworn the movie. An IPO was tomorrow or IBN is going to be the ticker. I'm not sure when it's coming. You don't see big IPO's on, on, on a Monday really? Um, But how much of the CVS run up to his reveal and everybody's pumped, you know, with reveal and two outside catalyst as well.

For all the other stuff, he I'll tell you how pumped it is. Go look at the four chart. That's how pumped it is. And, and, and, and, and forward this, I, I agree with you re it is getting a pop because of Caribbean as well, obviously. So 40 eventually seeing 20 bucks, I don't know. It's close 1972 on Friday. Yeah, Ford.

Ford's got a still long, 12% stake so that their headquarters, somebody said catchy saying Wednesday, catchy is always right. That's going to correct us anyway. But yes, I knew it wasn't today there, their headquarters is I right out. Um, where my mom, uh, my mom stays. I go by it all the time. Revealing. All right, well, we didn't get the 500 likes, which means no dad joke with.

And unfortunately, plus for that one, I guess I'm saying this was the weekend one. Dad's love. That's got some kick to it when they're eating spicy foods. I think I say that. Okay. I'm going to hop over to cover some tickers, so everyone have a good day and we'll talk to you later on. All right. We'll catch you later.

Joel, we'll catch you later then Dennis, our catch, uh, the rest of you, uh, coming up next wive trailing with Benzinga Mitch, Ryan Junaid, and I'll stop by for a few. Um, so we're going to have some fun at the open and do what we normally do. Everyone hit that like button, please. And thank you, please remember all the information from our show meant to be used as informational purposes and not for investing or trading advice.

Thanks for watching. We'll see you coming up next on alive. Yeah. And, uh, let's, let's make some good trades and make some money today.

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