Another Monday Fade With Some Bright Spots; Robinhood, Carvana, Unity In Focus

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0:24Good afternoon, everyone, and welcome to Stock Market Today for Monday, December 8th. It's Alexis Garcia here. And stocks faded on Monday to start out the trading week. And all eyes are going to be on that final Fed meeting of the year on Wednesday with expectations of another rate cut. And here with me to help break down everything you need to know about today's market action is IBD Market Research Director Justin Nielsen. So, Justin, kind of a big week for investors. What's on tap for us today?

0:58Alexis Garcia:Well, yeah, I guess a big week. And then there's also a lot of the holiday kind of wind down as people are doing their Christmas shopping and holiday vacation plans and everything like that. But we've still got a few stocks that are looking interesting out there. And again, it's been a little bit tough with these fades, but Robinhood looked pretty good and that closed well in its trading range. I do have a position in that. Carvana really skyrocketed after getting added to the S &P 500. That helped boost that quite a bit. We'll also take a look at Unity software. So those are the three stocks to look at today.

1:31All right. Well, great group to watch. Let's go ahead and just check in on the major indexes to see how they finished up the day. The S &P 500 down about half a percent. The Dow also down about half a percent. The Nasdaq finishing the day down a tenth of a percent, and small caps were up fractionally. So Justin, as I get my charts going here, talk to me about the current market action, because we saw indexes inching up last week, a lot more stocks offering entries, but another fade today. But overall, it seems like the market rally is in good shape.

2:11Alexis Garcia:Yeah, one day does not a trend make. What we really have to kind of focus on is the last 10 days in which we've been up almost every single day except for one. So having one down day here and there, again, the fades are not fun, you know, closing in the lower part of the range, but there are still stocks to look at. And it should be remembered that as much as October and November were really kind of tough going for a lot of individual stocks, especially in the AI space, we're still like just a percent off of our highs. So we're right there, almost at new highs. I really liked how we kind of broke out of a little area on the NASDAQ composite, right about, you know, 23 ,500.

2:57Alexis Garcia:And so while we did pull back a little bit, we're still above that 23 ,500 area on the NASDAQ composite. So yeah, I'm always more grateful for the up days but we did finish off of our highs today does not count as distribution despite heavier volume because it's not down enough right 0.14 percent is not a distribution day that's not enough selling to you know to trigger anything so overall you know we've still got a market that's in an uptrend we got back above that 21 day moving average line and the 50 day moving average line and we're continuing continuing to keep the lows above there so I like how we're trending nicely Yeah, we're just on the Dow here, Justin.

3:42This one down, again, about six-tenths of a percent today. But any thoughts here on the Dow, or do you want to look at small caps as well?

3:50Alexis Garcia:I think small caps are more interesting. The IWM, that was right there at new high territory. Again, faded just like it did on Friday, but still holding up well. And look, that's not a disaster either. After such a strong day that this had on Thursday with the Russell 2000, we're looking at IWM, which is the iShares ETF. having it pause right here that could really give us a nice setup and I should mention that I do have a position in the index not with IWM but with some of the leverage products and futures but yeah I think that if I see this go above that 252 you know area then I'm probably going to be adding to my position so I've already been kind of scaling into this one once it crossed the 50-day moving average line.

4:38Alexis Garcia:Once it had that successful test and bounced, I like how it added to the gains on Thursday. So I added a little bit to my position. And again, I'll probably add some more if we get above that 252 area and we're right on the cusp. So I don't mind it hitting its head a couple times. But if we get turned away from there and kind of go further south, then I might have to scale back on my ads and I can do it incrementally. The last ads will be the first ones out. But if it does pop above there, then I think that's a, you know, either a place to initiate or to add to positions. All right. How about market breadth?

5:14We can check on RSB because it does seem like more names have been participating. This one down about six tenths of a percent today. But what are your thoughts here with, you know, again, we had a lot of stocks setting up, but what do you see going on with market participation?

5:29Alexis Garcia:Yeah, I mean, it definitely is. It's interesting that RSP, the equal weighted S &P 500 got actually up to new highs before the S &P 500 did. So that's something that's a little interesting. And, you know, today, look, RSP was down a lot of the ETFs, the sector ETFs, the S &P 500. you know, there were, I think the only one that was up was XLK for the day, which is the technology sector. So yeah, with all of the sectors being down, yeah, it's going to be tough for the RSP equal weighted to go against that. But overall, we've had a lot of days where the advances have been higher than the decliners, you know, on both the NASDAQ and the New York Stock Exchange.

6:15Alexis Garcia:And And that wasn't the case today. But again, one day where it kind of consolidates gains, that's not a disaster. Yeah, we're on QQEW here, Justin. That's the NASDAQ 100 equal weighted ETF. And again, down about six tenths of a percent today. But I mean, this gain since hitting this 134.47 low here back in November, really impressive. Yeah. And I mean, we can kind of bemoan a down day here and there. But the reality is, if it was up every day, we'd complain about that, too. like, oh, we got to have a pullback or it's a runaway rally. So it's hard to please us, Alexis. Well, let's take a look at maybe ARKK can please us of some sector ETFs.

6:57Again, this up about a tenth of a percent today, Justin. But again, we've seen growth really come on here over the last few weeks. This one inching closer to the 50-day line. So what are your thoughts here?

7:08Alexis Garcia:Yeah, definitely risk on is still good to go. And look, this was a tenth of a percent gain is not much, but that's considering that Tesla, which is a larger position for ARK, that was down 3.4%. So the fact that ARK was still able to do a gain today actually speaks pretty highly of it. But it definitely says, look, growth is seeming to be on the comeback trail. And while this is further from its highs, it's going in the right direction. So I'm looking at this as a 50-day moving average line as an area. Once it gets above that, this is going to be looking a lot more interesting to me. And it's already, if you kind of do a downtrend on the highs, you know, starting at 92.65, 90.78, perfect.

7:54Alexis Garcia:You know, you've got something right there at the 50-day moving average line. So kind of two converging areas that are of interest. And, I mean, that's right around where this resistance level is that we're finding right here. we have kind of this area get hit a couple days ago. But if you kind of draw a line to the left, you see that this was an area of congestion at the beginning of November as well. And we're seeing a lot of stocks and ETFs kind of doing that same thing. It's at an area of resistance from last week around Wednesday or Thursday. And it's also an area of resistance that these are coming up to at the beginning of November.

8:30Alexis Garcia:So it's just a matter of how do they handle themselves. Right now, I think the expectation is that we're going to see some breakouts above those areas. And some stocks are already doing it. So those are some that we're going to look at. But that's the expectation. And if it doesn't happen and we get turned away, then we might just have to back off a little bit. All right. Well, we'll be keeping an eye on that. It looks like 83, 88 level coinciding with the 50-day line, Justin. Let's take a look at XLY. That's the Consumer Discretionary Spending Select Spider ETF. This one down about 1.5 % today, but in this double bottom with a 121.50 buy point.

9:09Alexis Garcia:Yeah, not a disaster. But again, when you have Tesla, which is about a 20 % weight on XLY, that's going to leave a mark. But I should note that it's not just Tesla that was bringing this down. If you look at RSPD, that wasn't down as much. XLY was down about 1.5%. This was down still a solid, you know, nine tenths of a percent. So there was a lot of stocks that were getting hit here in terms of the consumer discretionary area. You know, since since we're talking about it, we might as well look at XRT, which is the retail. You know, that was down a lot more mildly. It's a little bit fractured, right?

9:48Alexis Garcia:We are looking at some areas like, you know, AEO or Urban or Tapestry. You know, some of these kind of higher end Ralph Lauren that are looking a little bit better. as opposed, and actually some of the discount too. We had Dollar General, DG, with earnings last week that really did very well. It came down pretty hard today. And also Dollar Tree, DLTR, that came down considerably today. But still, given the moves that we had last week for a lot of these areas, it's still fairly minor, today's action. And just pulling back a little bit and giving up some of those gains, but certainly not all of them.

10:29And how about we check in on chips? That's SMH. This went up about 1.1 % today. And again, adding to those gains and looking really good here, Justin. Yeah.

10:41Alexis Garcia:And look, this is, you know, usually when we look at strength and chips, we immediately look at NVIDIA, which I mean, NVIDIA was doing fine. It was up 1.7%. But really, I think the story here was on Broadcom and how, you know, different, you know, different areas, different vendors are starting to say, hey, yeah, we're going to be looking at using Broadcom chips. So that was up 2.7, 2.8%. So that was looking good there. leaderboard stock LRCX, Lamb Research, you know, that was up two and a half percent. So there's a lot of pockets of strength here outside of NVIDIA. So you don't have to just go with the big guy.

11:20Alexis Garcia:There's a lot of other areas to be looking at here. We do have Broadcom earnings this week. So I know we'll be paying attention to that for some of the guidance they'll be offering there. Let's jump on over to ITB. That's the home construction ETF. This went down about two percent today falling below the 50 day line and look this is where it becomes really important to make sure you're cutting your losses i i loved the look of this on wednesday and i hated the look of this on friday you know so it's one of those cases where it looked like it was really ready to go but you can have a thesis you can have an idea of something that you think is going to work but if the market sell tells you something different i always listen to the market so this is a good example of something that was looking good it's just not looking that great anymore now back below its 50-day moving average line so you know maybe this just needs a little bit more time maybe i was too early but i'm certainly not going to sit around and wait to find out how bad it could get i'd rather cut my loss quickly that allows me to do more tries on things because if i'm cutting my loss quickly all i need is kind of one big winner and it'll wipe out a lot of very small losses now Now, if we look at Jets, in contrast, that also had kind of a very nice looking day on Wednesday, but we're getting a follow up on that one.

12:39Alexis Garcia:So let the market give you the feedback. The ones that get the strength and continue higher, those are the ones that deserve more of your money. The ones that go the other way, cut your loss quickly, don't add to them, don't put good money after bad. And again, you're just letting the market act as a feedback mechanism. And that's really how to get more money into the winners and less money into the losers. Yeah, we want to put that money to work. And again, that move on Thursday, Justin, up about 1.8%, putting it above this$26.99 buy zone here and still technically in that buy area. Okay. Yeah, you know what?

13:18Alexis Garcia:I'm moving my mic down because a few people said I was low. So I'm looking at the comments. Thank you so much for folks putting the comments and maybe I'll project a little bit. I'm going to sit up and make sure my diaphragm is in good position. This podcast is brought to you by MassMutual. For 175 years, MassMutual has been there for policy owners, financial professionals, and communities through economic shifts and societal change. In a world that changes fast, strength and stability still matter, especially when it comes to helping people secure their future and protect the ones they love. Learn more at MassMutual.com.

13:55That's MassMutual.com. Well, let's take a look at some individual names here. You mentioned Robin Hood, Justin. This one up 3.4 % today, retaking the 50-day line, and again, building the right side of this double bottom base,$150.47, the official buy point there.

14:15Alexis Garcia:Yeah,$150.47, the official buy point of a double bottom. And I do have a position in this. Why am I buying it early? Well, if you look at the$120.88 bottom, that first leg of the bottom down, we have the Jesse Livermore rule. And the Jesse Livermore rule of shakeout plus three, what you do there. And, you know, the three was kind of for a$30 stock. Now that we have a lot more expensive stocks, we often look at maybe a 5%, 10%. So that is around 126, you know, to let's say 132. Well, you know, I waited until we could get back above the 50-day moving average line. And so I'm still kind of in that range.

14:57Alexis Garcia:You know, if we say 132, I'm within the 5 % range. We did add this to Swing Trader today. I bought it after we added it to Swing Trader. We have our restricted list timeframe where we have to wait 30 minutes. So after that, I added this to my account. So again, it might seem like I'm cheating because that 150.47 is staring you at the face, but this is kind of an alternate entry with that ShakeOut Plus 3 that we're using. No, I mean, especially with the market shop, we've been seeing those early entries so important to help build that cushion here. And just getting a look here at the weekly chart, Justin, again, this week, starting off the week, moving higher above this 10-week moving average.

15:40Alexis Garcia:Yeah, it was a nice close today too. Again, for a lot of stocks fading, the ones that held up best definitely get a little bit more of my attention. And look, all of this is despite the fact that Bitcoin, if we just look at Ibit real quick, that's been really getting decimated. And a lot of folks would think that hood would be, negatively affected by that, but it's really kind of held in pretty well, considering. All right. Well, let's take a look at Carvana, Justin. As you mentioned, a nice move on today, up about 12%, really powering above this buy zone. Again, a 401 buy point there out of this consolidation.

16:18But thoughts here?

16:19Alexis Garcia:Yeah. You know, it's interesting. You know, you get all of this kind of buying pressure as folks are needing, you know, funds are needing to add this to their portfolios because it's now going to be part of the S &P 500. So a lot of pressure to buy. And look, it was already kind of set up in a spot anyway. Now you had something like VRT, which didn't make the cut for the S &P 500. A lot of people were waiting to see if that would. Maybe some of the action on Friday was in anticipation of it getting there. And it didn't get the nod this time, but it didn't do too bad. But back to Carvana, what can you do here when something gaps up like that through the buy point gets extended so quickly?

17:01Alexis Garcia:Well, you can wait and see if it, you know, ends up giving you another entry. And just as an example, let's look at MDB that recently had earnings, MongoDB, and that had a really strong move, really up and out of there, not anything that you could have done with it necessarily when it came out last week. But then we had a little consolidation and it looks like it's ready to break out again so sometimes just waiting for that pause can it hold those gains and then i think on friday mdb offered you a chance to say okay well look now i have a place where i can put my loss uh cut my loss um when you're sticking straight up there above 400 it's like well gosh this could come all the way down to you know, 370, 360, and still that would be very normal.

17:50Alexis Garcia:But once it got that reversal, now you have like, okay, well, if it gets below the low of that reversal at 393, if it crosses below that, that's going to look funny, right? That means that reversal failed. So you have a way to kind of keep your loss small. So even, you know, even if you used, you know, did a buy today, you still have a way to kind of manage that risk. And that's what's really important. So for Kavanaugh, what I'd be looking at, since it's really, again, up and out of there right now, can it consolidate? Can it get comfortable at this level above 400? And if so, it'll probably just, you know, go nice and tight.

18:29Alexis Garcia:Now, sometimes they just keep on going and they never look back. And that means that, okay, maybe it goes up without you and you have to wait for the next base. But a lot of times they do do that little consolidation, not long enough for a base, but it does offer you another place to get in there. All right. Well, we'll be looking to see if it tightens up. Let's just finish up with Unity Software. That's ticker U. This went up 7 % today, breaking out of this 46.94 point. And we also see the RS blue dot here, meaning that line hitting new highs as the breakout happens. So again, Justin, nice move today.

19:08Alexis Garcia:Yeah, absolutely. A lot of things going for this. I probably prefer it a little bit more as a swing trade. And even there, it's a little extended right now. And why do I say that? Well, it's missing a lot of components of the IBD methodology, specifically on the fundamental side. 5 % earnings growth after negative earnings growth of negative 18 and negative 14. Yes, you know, it had some losses, you know, a couple years ago, and it's turned those into gains, but it's still, the growth is very spotty. If you go to the weekly chart, you see that kind of on the on the earnings line, that green line, it really ramped up very, very quickly back in 2023, 2024, and it's kind of flattened out.

19:52Alexis Garcia:So that's, you know, that's just something that's missing on the fundamental side. But on the technical side, which we do tend to lean a little bit heavier on on swing trading, as you mentioned, that RS blue dot, that's something that really speaks to me, the fact that we're, you know, breaking out of a cup area. Now, sometimes you will still get a pullback, what we call kind of a cup with a high handle, where it breaks out, but then it pulls back or maybe goes flat for a little bit. So that's something I could be looking at in order to get an entry here as a swing trade. But you got to also remember, look, if you're doing the traditional IBD methodology, this just doesn't have the fundamental chops.

20:32Alexis Garcia:So as good as the chart looks. Remember, there is a company behind these stocks, right? And if you don't have kind of good fundamentals there, you might not be getting that big long-term move that you expect. Now, a lot of times you can, because there's speculation of what's happening in the future for the company. But we usually tend to go with the things that are already proven, proven, you know, stories. They already have the evidence out there of their strength before we do a lot of heavy investing. All right, Justin. Well, thank you so much for your insights today. And it's another busy week for you.

21:09So what do you have on tap?

21:11Alexis Garcia:Well, in about a half an hour, Jim Ropal and I are going to be talking for the monthly market report. Since I was out in Kauai last week, I missed the December 1st, but we're going to do that makeup session. I'm sure you were very heartbroken. Yeah, I was there. Yeah. Yeah. I mean, I'd rather hang out with Jim than be in Kauai, right? Tomorrow, Mike and I are going to be doing a swing trader status update. So that's going to be live at 2 p.m. on YouTube as well. And then on Wednesday, Jeffrey Hirsch from the Stock Traders Almanac. He's the editor there. We're going to be talking about kind of a year in review and a look forward to 2026.

21:47Alexis Garcia:He's already got his kind of expectations for the year out in his Stock Traders Almanac. and then Friday we've got the regular SMT with Webby. So it's going to be a busy week. Lots to look forward to. Lots of good market content coming at you this week. So be sure to tune in. And that's it for us today. We'll be back with more market analysis tomorrow starting with IBD Live. You can head on over to investors.com slash IBD Live for all the details there. And we'll be back tomorrow right after the close. So we'll see you then. Most finance teams are spending on the wrong things. Expense reports that take longer than the trips they cover, spend policies living in PDFs no one reads, month-end close that stretches into weeks.

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