Market Overview

Name: Stocks Crashed at Open (Then This Happened)
Uploaded: 2026-06-04T22:26:25+00:00
Duration: 17 min 55 s
Channel: Arete Trading
Description: Summary and key takeaways on Stocks Crashed at Open (Then This Happened): Summary & Key Takeaways, covering Market Overview The NASDAQ opened down 1.6% but

Arete Trading

Jun 04, 2026

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17 min video

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2 min read

YouTube video ID: ZcP1OE_AbWY

Source: YouTube video by Arete Trading — Watch original video

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The NASDAQ opened down 1.6% but quickly experienced a massive rotation that reshaped the day’s direction. Institutional levels acted as the primary drivers, and retail traders are urged to identify these levels ahead of time. The first hour displayed a repeatable “shake and bake” pattern, making the market’s early movements highly predictable. Non‑farm payroll data remains a key macro catalyst, with market sentiment poised to react to the upcoming release.

Technical Indicators & Strategies

A critical rejection point sits at the 744 level on the NASDAQ; watching this level helps spot high‑probability setups. When a stock retests a level and then makes a higher high, the trade offers a clear stop‑loss area and a better chance of success. Market breadth stayed strong during the dip, as 62% of NDX stocks sit above their 50‑day moving average, indicating overall resilience. Traders can choose to scale into positions rather than rely on a single entry, leveraging the “undercut and rip” phenomenon for incremental gains.

Sector Analysis

Capital is rotating out of semiconductors and into broader sectors such as genomics and the wider S&P 500. Semiconductor equipment makers remain robust, while the “TPU vs. GPU” narrative puts Nvidia in a favorable position after Broadcom (AVGO) missed its TPU sales guidance (expected 172, actual 16). Genomics ETFs—including IBB, XBI, and LabBu—are attracting attention as the rotation gains momentum. Defensive trades like XLP are viewed as traps lacking upside, and the defense sector shows unusual movement in RTX and DFEN, hinting at geopolitical concerns.

Earnings & Corporate News

Google demonstrated strong performance with successful secondary pricing, reinforcing its market strength. Lululemon delivered a “dumpster fire” quarter, with weak comps and sales dragging sentiment. In contrast, Sienna posted solid earnings, and its stock decline is attributed more to broader market weakness than company fundamentals. The defense sector’s upward moves in RTX and DFEN are being monitored for potential escalation signals.

Trading Mindset

Most traders react to institutional levels, and the goal is to anticipate those moves before they happen. Recognizing higher‑probability setups—such as retests that produce higher highs—can improve trade outcomes. The repeatable early‑hour “shake and bake” pattern offers a reliable watchlist, while avoiding defensive XLP trades helps sidestep low‑upside traps. By aligning technical cues with macro events like payroll data, traders can navigate the current rotation with greater confidence.

Takeaways

The NASDAQ opened down 1.6% but quickly rotated, with institutional levels driving the day's direction.
Watching the 744 rejection point and retest‑higher‑high patterns yields higher‑probability trade setups.
Capital is moving from semiconductors into genomics and the broader S&P 500, while defensive XLP trades are seen as traps.
Google’s secondary pricing remains strong, Lululemon posted a “dumpster fire” quarter, and Sienna’s earnings were solid despite a price dip.
The repeatable first‑hour “shake and bake” pattern and upcoming payroll data provide reliable macro cues for traders.

Frequently Asked Questions

What is the "shake and bake" pattern in the first hour of trading?

The "shake and bake" pattern describes a highly repeatable market behavior in the first trading hour where rapid price swings create predictable entry opportunities. Traders watch this early volatility to set watches and align trades, as the pattern has proven consistent over recent sessions.

Why are defensive XLP trades considered traps in the current market?

Defensive XLP trades are labeled traps because they lack sufficient upside potential amid the broader rotation toward growth sectors. The market’s strength in higher‑risk areas like genomics and semiconductor equipment reduces the appeal of low‑volatility defensive positions, making XLP less attractive for profit.

Who is Arete Trading on YouTube?

Arete Trading is a YouTube channel that publishes videos on a range of topics. Browse more summaries from this channel below.

Does this page include the full transcript of the video?

Yes, the full transcript for this video is available on this page. Click 'Show transcript' in the sidebar to read it.

opened down 1.6% but quickly experienced

massive rotation that reshaped the day’s direction. Institutional levels acted as the primary drivers, and retail traders are urged to identify these levels ahead of time. The first hour displayed a repeatable “shake and bake” pattern, making the market’s early movements highly predictable. Non‑farm payroll data remains a key macro catalyst, with market sentiment poised to react to the upcoming release.

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Provides foundational knowledge on chart patterns, moving averages, and RSI, which are essential for executing the technical strategies discussed in the podcast.

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Full Transcript YouTube

NASDAQ opened up down 1.6%.
The important thing is what happened
after and we saw a massive rotation
today. So, let's get to it. We're going
to go over some key levels that will be
helpful for you tomorrow. So, you might
want to mark some things off. I do want
to go through a more broader picture as
well from what I'm seeing the rotation
and then I'll cover it pretty in depth
on Saturday in our deep dive. So, let's
do it. Most traders are reacting to the
institutional levels. What we're trying
to get you to do here is to know what
they're doing ahead of time. Subscribe,
click all notifications. What we go over
here is timely by hitting the bell. You
don't get it after retail is already in.
The important thing is you get the
information education that you need.
Subscribe. Let's get to it. The very
first level you're going to want to
watch tomorrow is the level you
rejected. So, you have the previous
close and you can see when we got up
there, those people had second thoughts.
So, you're going to want to watch that
744. Now, you have non-farm payrolls
tomorrow, but if you just mark that off
and just note 744, that's where we
started to reject. There's a couple
things about this that I think are super
important. We don't really need to talk
so much about the undercut and the rip,
but this was a really great spot to put
on some trades, and there was a lot of
ways to look at this. I do want to cover
this in case it happens again so that
you guys can look at that. I do plan on
doing an educational video on how to use
this because this was very clear what
happened here. Didn't mean to make a
rhyme, but it's just a natural gift. So,
if you could take a look right from that
last hour on and then what we'll do is
we'll just mark that off at 3:00 and
we'll look at the last hour. You'll
remember last Saturday's video, we
talked about the last hour and how you
have to start watching it because of
where we are. But if we look here, 7:42,
so we sold down. Remember, you have
non-farm payrolls tomorrow. So, that'll
be watched extremely closely. But I
would watch that level again 744 very
closely. I'm going to clean all this off
and I just want to show you this one
thing before I go any further because
it's on my mind. If you take a look here
at the RSI from where you are and then
you hit a low and you hit a higher high
and then you hit a low and you hit a
higher high and then you can see that
was pretty much it and you just dipped
and ripped. It really was not rocket
science at that point. But you know that
it's always easier after the fact, isn't
it guys? So when you go and take a look
at this and go don't go continue. We
don't have time to edit. We're going to
have to leave that out. We're going to
try it one more time, guys. And then Oh,
you even flipped the screen and
everything. Okay, here we go, guys.
Well, at least you're watching me learn
how to use the computer at the same
time. Come on, boomer. Get it together.
Here we go. Let's get back to it. And
this is what I want to show you. If we
click on that, no, do it this way. Let's
do it on the one. And now we'll click
here. Start. No, that's it. Questions
are going to get harder as the day goes
on. So, if you look at that during the
day, no, that's not easy to spot it.
It's very easy after the fact. But when
you're watching this play out, what
you're doing is you're making decisions
while you're seeing it. So, you're
watching this play, you're going to
watch these highs. Can it get over that?
You're seeing that divergence and then
you have to make some decisions, right?
This little undercut here was pretty
much all you needed to see. And then the
push because then what you can do is
just mark that level off and say tried
to get over, failed, got over, held, and
now you're just watching that level. And
it doesn't mean that it's going to hold,
right? We have to understand that. We
don't know that that's going to hold or
not. So, let's just stop it for a
second. You don't have a clue, but you
know that you have a higher degree of
probability if you come back, retest a
level, and make a higher high, and then
you can use that area as a stop. That's
very different than just getting the
devil horns that you got right here,
which is wick, the little face wick, and
then the undercut, right? And then
you're getting kaibosed and undercut
right in here. Also, the shake and bake
that's happening in the first hour of
the market has just been over and over
again. It is, you can set your watch to
it at this point. It's literally every
day. So, watch that tomorrow morning cuz
I think that if you get a bad non-farm,
they could do something very similar.
You do have some stuff here that is not
good. I've seen good before and no it
doesn't look like this. You have a peak
and then you rolled over, right? It's
not crazy. You have a peak here. So,
you're getting a larger peak in here. If
we drop this to the four, it's not as
bad, is it? Right? So, it's kind of
interesting what's developing. What I
think is most pertinent about this is if
we come here and I want to go through
these indexes. I'm really excited to do
it. So, if you look here, you couldn't
even get down to the 12. Like, you
couldn't even get down to that level.
The NASDAQ couldn't even stay down for
an hour before bouncing. And I think
that that's telling you a lot about how
much volume's out there and how many
people are out there looking to get
involved. If we take a look at the SPY
and we just look at our levels, here's
the that top. Where'd we come to? Right
to the 12. Held the 12, reversed, and
flipped. This is pretty textbook stuff
and it's exactly what we're looking for.
I really don't have a lot more to say
about it. And I will say this, I think
you're seeing more rotation into the
space of the S&P than out of the space.
And I think you're broadening out into
other things besides semiconductors. And
I'll show you now. A lot of people in
the room are trading the genomics names
that are in the community. I I'm not
really trading those. I've been really
myopic on semis lately and software. But
if I take a look at something like this,
we've gapped up over and now you can see
where we are up and over on IBB. IB is
more concentrated XBI. If we look at
XBI, you're less concentrated, right?
You're more diversified in XBI and you
can see how that's going. If you take a
look at LabBu, you can see that you are
starting to bounce off that same level
and you close back over the 55. What I
think super interesting is it's the
genomics area. If we look at genomics
and how this is holding up right across
this retest and went. So, this is
exactly what I was just talking about,
but on a daily chart versus a five. See,
when you start understanding these
patterns, you'll start seeing them
everywhere and even in your sleep. So,
you have these like one minute, five
minute up, down, over. All you're doing
is just extending the time frame out.
That's a lot of volume. I got asked a
lot about this one today and that's
exactly why I'm covering it candidly
because they're dead right and I'm not
on this at all, but I'm looking at this
and you know, triple tops are pretty
rare and I don't think that that's
what's going on here. If you go through
those holdings, and I'll cover some of
those holdings on Saturday, you can see
pretty clearly what's going on here. And
I think that's very important. I think
there's also some really important moves
here with semis. You undercut, you gap
filled right in here. If we go and take
a look at this on a five, and we'll get
rid of the pre and the post, you can
just see the roll. But here's your gap
fill. And you exactly came to that,
filled your gap from this level. And I
think that's really important. So
there's that June gap and then you came
down, tested that, held and if you were
going to break, I mean, this is where it
would happen. Instead, we came right to
that level, held that level, came back
up. But again, we really want to watch
tomorrow because end of day we sold off.
And a lot of that, I think, is we had a
if you traded this properly, you had a
really good day following the trend,
right? So if we think about it that way,
you make that all that money on some of
these trades and then you just get out
of the way and you come in the next day
and I mean it was pretty much like that.
So I mean AMD was just absolutely
perfect the way it broke down. Got
involved with it and I actually got
involved with this pretty late in the
game. I was more interested in just
buying the entire market the semis
and wasn't easy at first. the first one
I got stopped out of on the SO XL, you
know, because I'm you're trying to catch
it because you don't know if you're just
going to rip or not. You're so you're
kind of a little hesitant there. A
better strategy, but I didn't know how
fast it would be. Would have just been
scaling into it, right? And just set
setting levels, but instead I was just
looking for a one entry. In hindsight,
it might have been a better strategy to
scale into that like a pyramid on the
way down. like start with, you know, 10%
then 20 30 40 and just pyramid it down
anyway cuz I did expect a bounce and we
we're going to talk about that in a
second. But if you look at this once you
started getting above these levels, that
was pretty much it. Then you can just
start seeing these retests of those
levels and then you just started
ripping. So this provided a really great
day trade for us. I'll grab the time
stamps because I like showing them when
we do these things so that people can
actually see them. And I want to show
this too because I thought it was
important. You know, you don't have to
be first. You know, sometimes you're
just better off letting it settle down.
And today was one of those days where
the people that just let it settle down
and build. I have friends that have been
trading forever. They really just don't
even trade the first half hour. They
just let it all shake and bake and then
they come in, look at the setup, and
then make a decision on what they want
to do from there. You know, everybody
has different styles. Everyone, you
know, whether it's chocolate and vanilla
ice cream, everybody has different
tastes. But this provided a lot of
opportunity today. And it wasn't just
AMD, it was Marvel. And you can see
Marvel did exceptionally well, but end
of day obviously people are going to
take those profits out of those names
and again just was not there. It was
also ARM but it was all the same soup
reheated just different names right and
that's why I think that the trade to me
was just go long the semis like why try
to pick there is one sector of this that
is a lot stronger and it's the
semiconductor capital equipment makers
and I'll cover that on Saturday like
which ones and why but I think that's
important. The memory stuff was kind of
interesting because of everything that I
thought would have held end of day, they
really didn't hold anywhere near there.
And what I was trying to get people to
understand is when you're starting to
climb like this, the best thing that you
can do is just put your stops on the
hourlies. And once you broke on the
hourlies, that was pretty much it. You
can literally see the first lower low on
the hourly. Once that broke, that was
it. And I'm I can explain why not
tonight. I'll do it on Saturday, I
think. But when you start to see those
hourly levels and you're climbing like
that, everyone's looking for the same
thing. And of course, we're watching
2:30 densest favorite time of day
because then you start getting into the
last 90 minutes where people start
prepping for what the institutions are
going to do, their order book, etc. And
it just seems like people want to step
out of the way for non-farm. I don't
really have a problem with today, and
I'll explain why, you know, and a lot of
people caught this, and people caught it
pretty quickly with the AVGO. This is a
problem maybe for TPU. And please listen
to those words. Maybe it's a problem for
the TPU side of the market. We don't
know that yet. We just don't know if
that CEO, if you ever look at AVGO, it
is literally the worst conference call
out there. You watch this guy speak, we
were actually up that time and then the
CEO just tanks us. And frankly, they
just have a very contentious
relationship. Try not to laugh, but if
you ever listen to a conference call,
like they're just the analyst and the
CEO, they're they just don't they don't
get along. It's kind of funny, but
nevertheless, he was just all over them
last night and they were kind of giving
it back a little bit. But the bottom
line was TPU, you missed. And we did
this live last night on purpose, but the
you missed on the chip sales. They were
supposed to be 172, you came in at 16.
You can't have lowered guidance going
forward on TPU sales and have this kind
of multiple. It's an earnings driven
rally. It is what it is. And so what a
couple people in the room picked up and
they were rightfully so was that hey you
know who's going to benefit from this
Nvidia and you can see the mark first
half hour down reverses and absolutely
rips and they do you have that battle of
TPU versus GPU so maybe there's
something there and then you watch
Google today come out and say by the way
everything's grand right we're doing
fantastic the kids still say grand right
so I do think when you look at something
like Google here which just absolutely
gap filled hit a level and now you can
do whatever you know you I think makes
sense. But and they priced that
secondary, which is huge. But you look
at that, you have a basically a white
marbuzu right here. And that's where you
have the open being the low and the
close being the high. And you can see
how you held perfectly into that gap.
One, two, down, up. I wonder if there's
any volume on that. You know, ding,
boom. Right there it is. And you never
even got down to that 55. So, I really
like this a lot. And it's super
interesting the way that that's holding
there. And then you have the RSI as
well. That's also the cat's pajamas. So,
I really like what I'm seeing here. And
we'll see how this holds tomorrow. I
don't know if I want to step in front of
a train ahead of non-farm cuz jobless
claims came in pretty heavy today. I
think that from my perspective, that's
how I'm viewing the market. I know a lot
of people are looking at names like
Apple and going, "Oh, Apple keeps
grinding because, you know, Siri's all
of a sudden going to be okay." I
actually think they look at Apple the
same way they look at Walmart now. And I
just think they look at it as an XLP
name. Candidly, they tried to, you know,
rally Walmart a little bit today. Okay.
Costco. Okay. And then what happened?
End of day, they just reversed them,
right? So, I I don't really think that
we're going into the XLP trade. I don't
think that that's where this is going.
If you look at that, that's exactly what
they thought today. They came in and
they bought the conservative trade. And
this is why I hate doing this trade. I
just rather be in cash. Like, if I'm
going to buy the XLP names, I want to
buy them for what they are. I don't want
to buy them because I want to be
defensive. It's like a nightmare. You
know, they just every time you do that,
you just wind up getting trapped and
there's not enough juice in the squeeze
that it even makes sense to do it. And
then the next thing you know, you're in
Proctor and Gamble wondering why you're
down $4 in a soap company, right? If you
were going to lose money, you can do
that semis. So, I I'm just not a big fan
of doing that kind of trade. It never
really made sense to me. I know guys do
it and if you're going to have like a
long period of that, even with that,
it's very difficult. Well, you remember
back here when we had all that winning
and liberation even that really wasn't a
great time, was it for doing those kinds
of trades? So, I tend to stay away from
that. Tomorrow, we have to get through
some key data. And I just want to just
show you something that I think super
important here because I don't think a
lot of people are just watching these
levels and I think you should. As
always, what are we looking at? The 200,
the 50, the 20, and the five percentages
of stocks that are above those averages.
And if you look here, the five right in
this area and this is Thursday. So let's
go to here. So you can see this is
Thursday. Waited for it to come in.
Takes a while to populate. Sometimes
you're lifting up and you're curling up.
The 200's curling up, right? The 20's
curling up and you're hitting what?
Almost a higher high. The five's curling
up and we just want to look at that for
a short term. So the breath did not get
worse today on that dip. It actually got
better. And I think that that's a really
important really important for me to
point out to you. Now, if I go here and
take a look at something like NDFI,
Sienna actually had good numbers. I
don't really understand why it was down.
And we look at the NDFI, you're back at
that level right in here where you're
back to 62% of all names in the NDX or
above their 50-day moving average. You
have a pretty strong market. And I
really think that the Sienna trade,
frankly, was just down because
everything else was down. This was a
really good report. And of course, it's
moved a lot. But if I clean off all my
nonsense and we just go back to that
breakout bar, you never broke. You came
down here. And don't get me wrong, guys.
I know these swing trades. Like, this is
vicious stuff. You know, to be in these
names and say, "Oh, just hold them." You
know, it's only 120 points or 150 points
among friends on a $600 stock. Yeah,
that's not my game either. So, these
some of these names, they do become
trades and I think you have to view them
that way. But that was a really good
quarter. What happened after hours?
That's interesting. Lulu missed.
Absolutely just shocked, I tell you.
Shocked. $99 for a t-shirt for guys to
work out in. And the company's having
problems. Who knew? New CEO coming in.
Sometimes these are kitchen sink
quarters because the new CEO, you know,
they want him to like win, so they just
throw everything out the window. I don't
know about that. This was a really bad
quarter on comps and sales. you know,
Chip's really having a tough time there
and he's really not getting what he
wants out of it. But I don't know. I
think if you look at that founder and
how he's putting pressure, you would
expect something to happen, but you're
just not getting that. And you've had a
lot of activists come in there and try
and straighten this out and they're just
not able to. But that was an absolute
dumpster fire. And you had some really
decent quarters tonight. Uh PL was
really good, you know, and I think you
obviously could see all the space names.
We're going to cover that on Saturday in
detail. SpaceX and how to play it, what
to consider. I think that'll be helpful.
But PL was a good quarter and it just
doesn't seem to be getting any traction.
I didn't think DQ was that bad and DQ's
down as well. I just really feel that
the market felt a little heavy and
people are a little concerned about
non-farm payrolls. And the other thing I
find super interesting looking at crude
oil, we're not really dropping at all
anymore. No one's really believing like
no, we're going to we're having a
meeting about him having a meeting. like
people are kind of over that but al so
oil's going to stay here longer and that
might tie into non-farm tomorrow and
that's a concern. The other thing that I
thought was super interesting today and
I'm trying to figure it out is the
defense sector started lifting a little
bit here and it's almost I don't know it
was just it's like one of those things
you just watch and you're going okay
well why why are we starting to see the
defense sector start to lift a little
bit. Lockheed didn't do it but you saw
it through RTX. uh general dynamics not
as much and I don't really think it was
a here let's go to this I don't really
think it was just an outright you know
oh it's the drone names kind of thing so
I'm a little concerned about watching
that when I see DFEN start to pick
because people usually buy that if they
think that things are going to escalate
and I don't know if they are or not but
I just thought that this was interesting
and worth pointing out let's get through
non-farm tomorrow we'll be live for it
publicly and then we'll go from there
that's it have a good

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