Biotechs, Gold Shine As Many Techs Struggle; Oscar Health, Nebius, Gold Miners ETF In Focus

0:00Look, when people start to gamify investing, right? So when you think about people being rewarded with balloons and fireworks for trading, which we know is the more you trade, the worse offer you're going to be in the long run. I'm Joe Davis.

0:12Ed Carson:And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard.

0:31Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, August 19th. It's Alyssa Coram and Ed Carson here. And biotech stocks and gold, that was the area of focus today. Many stocks still struggling in the NASDAQ, almost hanging on by a thread to the strong uptrend that we were seeing a shift to, Ed. We'll unpack all of that. What do you have in store for us today? Yeah, I would like to take a look at Oscar Health, Nebius, and Goldminer's ETF, GDX. Sounds like a plan. We'll do that. But first, a closer look at those major indexes. Here's a look at the NASDAQ composite reversing higher on the day, but up less than 0.2 % by Sessions close.

1:22Ed Carson:0.2%, that was the S &P 500's gain today. So you can see closing off highs there. The Dow, a similar percentage gain on the day, holding above the 21-day line. The Russell 2000 outpaced the major indexes up about 0.4 % or so on the day, also finishing off highs. And when it comes to the Nasdaq composite action here, I mentioned hanging by a thread, but more of just the short-term trend, the power that we were expecting after that August 4th follow-through day. Definitely a change in tone after the gap down in Tuesday's session. And for a strong, powerful trend, we like using the 21-day line. And we are right on the bubble there, Ed, from that perspective.

2:16Yeah. So the good news is that the NASDAQ and the other indexes held their 21-day lines. I mean, it wasn't like a big bounce. He would have liked more of a bounce. There was some positive news, like the Treasury Department decided we're going to buy, repurchase some long-term debt, you know, and that trying to bring down the Treasury yield. That brought down the 10-year, and then TNY fell even more, the 30-year. I always forget, TY, TYX, TYX. I'm sorry, I always get that ticker wrong. So that fell more. but still the uptrend is intact for those and we'll see. It does mean that the Treasury will have to issue more short-term debt.

2:58I mean, we're running a huge deficit. It's not like they could just buy it without nothing. They have to do more borrowing elsewhere. So there's limits to that. That was still a positive. It suggests that they're going to try to cap the yields there. And obviously biotechs were strong but there were a lot of weakness elsewhere. So it was nice that we didn't fall. It was nice that we held the 21 day. It was nice that we didn't undercut the low, close below the low of the follow through days. Those would have been really negative. And in the NASDAQ, we didn't, we sort of got back toward the marked highs.

3:29I guess we're not, I don't know if we're really quite there, you know, so we're sort of moving up there. But so it was okay. It was an okay day. I mean, it could have been worse. It also could have been a lot better. But that's what, you know, when you have a 0.2 % gain, that's what it's always going to be, I guess.

3:44Ed Carson:Exactly. So, I mean, a powerful reversal off of the 21-day line. That is a compelling buy signal a lot of times. But, you know, we are finding support there. Can we continue to – can we see some momentum back to the upside? We'll have to see. But now with this touch of the 21-day line, a power trend for the Nasdaq composite, definitely out of the cards for the time being. Meanwhile, the S &P 500, with its gain on the day, did officially now meet all of the requirements for an official by the book power trend with the low above the 21 day for at least 10 days with a close up on the day. That's what we were waiting for last Friday.

4:37Ed Carson:So we now have that close up with the low above the 21 day. the 21-day and the 50-day stacked, and both of those in an uptrend. So is this in and of itself a buy signal, like a follow-through day? No, very different. It is a state of mind, I suppose, Ed, to lean bullish. And it is interesting because we are in an environment where, by and large, a lot of the stocks that were leading the market higher in the April-May timeframe are not the leaders right now. We're seeing that leadership elsewhere. But if there are stocks to buy, we do have this power trend that's telling us to lean bullish. So what's your take?

5:25Yeah, I agree. I mean, it's sort of a broader sense that you can be more bullish. It would be nice to see more strength on the indexes in the very short term. I will say one reason why is that we look at the market as some of those leaders in April, May, they're huge market caps. I mean, okay, some of the meg caps are okay, but you have a lot of the other names, a lot of those, you know, chip names, those AI, you know, 100 billion, 200 billion, 500 billion. A lot of the biotechs are moving today or maybe some of the, you know, some of the other things. Those are smaller names. Even some of the big names.

5:54Okay, Lily is different. But even some, there's not that many. I mean, a lot of the names that were really flying today, you know, they just tend to be smaller overall. So it's harder to push up those indexes. I mean, so maybe, you know, there are some more things that are working than you might think elsewhere, you know, than you might otherwise think. So it's, but, you know, the fact that the market is still rallying, even though a lot of big names were selling off today, it does show, you know, that there's real breadth. RSP, you know, that went up 1%. There really was never any problem with it.

6:27Okay, it came off highs, but you can see the broader trend has been very strong. This one feels much more like a power trend, honestly. Yeah. Yeah, a couple of down days, but we're right back at highs the next day. So, yeah, you know, look, especially if we pick up again, I think that would really start thinking maybe just feel like you're more confident to be more aggressive. But be more aggressive on where things are working, not be buying things that are beaten down. Buy things that are looking in position. So, you know, it's not being reckless. It's still being rules. It's just maybe just being a little more bullish.

6:58Ed Carson:Yeah. Well said there, Ed. and you mentioned biotech a couple of times we got to go there here's a look at the xbi up 5.9 on the day another one that's pretty popular that a lot of people look at is the ibb it was up even more 6.6 percent arkg also got some play on iabd live this morning and wow that one really uh Turned on the afterburners as the session progressed up 10.3%, really sparking this news that you flagged to the team early this morning. The Moderna news. And look, this stock finished up 200%. And it lifted a lot of the sector names with it. Yeah. There's also its partner Merck went up a lot, too.

7:49That's not nothing with it because that's actually one of the bigger ones. That's a huge move for a, you know, a pretty, they have plenty of drugs. And so that's a big move.

7:59Ed Carson:$330 billion market cap company. Yeah. So there was just a lot, you just saw a lot of breadth, a lot of stocks, just to sort of running, wow, I just, you know, just investors turned to it. It's not necessarily that there's that many mRNA companies out there, but a lot of biotechs really moved today. A lot of medicals moved, a lot of, a lot of drug makers moved today. So that was really clearly the source of strength along with gold. Yeah, exactly. So we don't have to get too far in the weeds here with the news, but cancer drug treatment innovation here, right, Ed? That was really what is getting investors excited.

8:36Yeah, Moderna's mRNA, some kind of vaccine, partnered with Merck's Keytruda, which is used for a lot of drugs, really worked well in melanoma. I think the thinking is that the sort of personalized vaccine could be used for a lot of other cancers, this, you know, delayed relapses and it reduced the risk of it spreading. That's one of the risks of melanoma is that it will spread to other parts of the body. So, yeah, just a huge game changer. Obviously, if this hadn't worked, if this readout had been negative, especially since there have been positive phase two numbers, this could have fallen a lot.

9:09So that's that's always one of the tricky things. It's hard. I didn't feel super comfortable buying. I didn't know what to do with biotix. You could have bought like an XBI today. It is breaking out, but it was a big gap up. And you could easily imagine that giving up a lot of gains tomorrow, say. I mean, Moderna is this way out there. That looks great. But at the same time, it's gone up a lot. And we'll see how things go. So a little tricky on that front. But, you know, for those who bought, there were earlier times when people could have got that. So people who did shift over and were diversified, you know, could have really benefited from biotechs, even if there wasn't a whole lot that was really, you know, really actionable today.

9:48Mm-hmm.

9:50Ed Carson:Yeah, you had a pretty healthy, robust discussion about all of this on IBD Live this morning. Names in the broader medical space looking compelling. Some of these various ETFs that were actionable, as well as a discussion on how to handle Moderna. Obviously, a very bullish move. You never know how a stock's going to finish when it gaps up 100 % at the open, right, Ed? so interest on this from both the long and short side. So we spent a good amount of time on the educational piece of that. And I think both sides of the trade at this point, you have elevated risk. So going with something like an ETF or something, you know, one of the heavyweights, to your point, you know, I'm playing Lily in this space that broke out today.

10:43Ed Carson:just the sector momentum that we're seeing. But let's move on and talk about the chips, SMH. You know, we did have a week rally up to the 50-day and now down two days in a row here. So So a shorting type of pattern here, Ed. Not a good look at the moment. No, it never really gave a clear buy signal, even just for that moment it was getting up there, but never really decisively did it and then faded. Then the volume is picked up the next day. That wasn't great. Yeah, so it does look like shortings. There's a lot of stocks that look like this in the AI hardware and build-out space. Yeah, I mean, yes, it could rebound.

11:33Yes, this is happening before. We could also go to new lows before it does that. You don't know. And it doesn't. And your stock may not be one of the ones that comes back. I mean, if you have something you're holding on, oh, it came up. It's just this is not sending the signal. I mean, you want to be buying things that are clearly the 50 day lines resistance. There's not just this, but so many stocks have hit resistance here or above short term highs above that. They move out and then they fell up really sharply. So, yeah, really, really not great day for that again. Clarity is a competitive advantage, especially when it comes to the economy.

12:09That's because anybody can know what's happening, but understanding why it matters is crucial. Hi, I'm Kai Rizdahl, the host of Marketplace. We provide the context you need to understand how the economy influences our everyday lives, from our local communities to the global conversation. You'll be smarter every time you listen, and these days, that's priceless. Listen to Marketplace on your favorite podcast app. Yeah, I mean, we could be in the early stages.

12:37Ed Carson:Who knows that of some sort of double bottom? And that could take a long time to play out if that's the case. You know, we could be, but we have NVIDIA earnings next week. So that could be a huge determining factor of the short-term performance of the sector, either up or down. Yeah, that's really going to be huge. It'll be interesting to see. Can a beaten raise really do it? You know what? Because, you know, they're going to have good results. I mean, everybody knows that. I mean, can they can they do something that really? Wow. It's because, I mean, NVIDIA is clearly one of the stronger stocks.

13:10I would also say that if you do feel compelled to buy the AI space, you might want to look for something with a lower ATR relatively. So if there's a big sell off, I mean, that 3 percent ATR, that was not a good day. That was not a good day. It's had a couple of bad days. And, you know, people who sort of bought the pseudo pseudo handle, you know, and it peaked out, they're down, say, four or five percent. but you're not down 15%, 20%. So, I mean, again, I don't really think that's in position right now, but you want to probably, in the short run, look for ETFs or stocks that are not only just looking better chart-wise, but have lower ATRs.

13:46Ed Carson:I totally agree. Okay, let's take a look at software. We have the IGV. Looks like this is forming a handle on the right side of a base here. so far, and then Hack more specifically focused on the cybersecurity. Very different look here. So the broader software sector versus cybersecurity in particular, that's the area in software that we saw a lot of selling today. Yes. And a lot of the other leading software stocks, the stocks that have been making new highs or setting up, those are the names that sold off today for the most part. It'll be interesting, whereas it was still more beaten down names or names that are recovering.

14:28ServiceNow, Salesforce. We'll get CrowdStrike and we'll get Salesforce next week. So we'll see. That'll be big. But it's a little disappointing. So again, yeah, those AI stocks fall. And then it's like, oh, no, that's OK. I'm in software. I mean, oh, I'm in the leading software names. Well, they're now down several days now. Again, on some of them, where you bought them, you know, it depends on where you bought them. I mean, those who bought a few months ago, OK. You know, but others, you know, if you bought more recent consolidations, they may have given up, you know, like two thirds, three quarters of the gains.

14:57and they might have earnings coming up. So investors will have decisions to make. You don't want to let a good winner turn into a loser.

15:05Ed Carson:Mm-hmm. Okay. Bitcoin percolating, perking up. Ibit up 6 % on the day, breaking a downtrend. Is this a groundhog day with what happened with gold the other week? Now we're starting to see Bitcoin make a turn. I mean, there was quite a bit of buying here today. There's been a couple of attempts at moves off lows. Is this time different? I mean, well, the yields came down a little bit. They only came down a little bit, let's be clear. But the dollar came down a lot. So that was something else. There was also some news. And we'll see how that looks. So that was a big drop.

15:47And there was also some movement on maybe setting up a vote on this Clarity Act, some crypto legislation. The SEC is moving on some crypto rules. So there was a lot of positive tailwinds. I don't know. I mean, maybe it's like, you know, I guess today is not a terrible day to buy because there's a little room to the 200 day line. But I think you really want to get over the 200 day line really a lot. And, you know, for that, because it's been a long time since it's been able to get above that.

16:13Ed Carson:Yeah. And maybe there's people flowing out. Maybe people are flowing out of AI and, you know, there's sort of that momentum quality. It's like, I want to go into something. And honestly, you know, and because I think that's one of the reasons why crypto has struggled is that there was so much more excitement with these companies that had real earnings. And it's like, well, why am I stuck around in this, you know, this thing that keeps on falling? And so I think that that lost a lot of attention. Yeah. So multiple factors at play here. I also want to point out something kind of fun on the chart for us technical nerds here.

16:49Ed Carson:We do have a three waves down pattern, Ed, on Bitcoin. We know that this is a pattern that you can see throughout stock market history as you know kind of an area where you would see a turn after you get a three waves down i do agree that that 200 day or the 40 week line looms large that's uh that's going to be a pretty thick brick wall to have to bust through but a notable move today a notable week for the crypto trade yeah For sure. Unfolding. So a good segue to gold, you know, getting some gold vibes from the Bitcoin. You know, you look three weeks back here on the GLD, we saw a similar break of a downtrend move higher.

17:40Ed Carson:This one now is right at the 200 day after a nearly 4 % gain today. The gold miners, here's GDX. We've made a little bit more progress above the 200 day. um so that's why i decided to go with this one today a couple minutes after the open i liked that it had gotten above the 200a versus the gld this one is a little bit more high octane i guess we can compare the atr gdx is at four percent gld 1.8 so you know you get a little bit more spice as you like to say ed a little a little heat there uh i would love your thoughts on what's going on with the gold miners. I think, I mean, I should have done what you did, but I agree with you.

18:26This is, I like it, the fact that it got above and it held there and it moved up. I mean, that I think is a little safer, a little, little more overhead is gone. You know, the miners tend to outperform on the upside and the downside. And so if you're going, you know, this is a, this way to play it. I mean, obviously if you sort of feel like maybe today's move by the treasury is, is a real negative for the dollar. If you feel like, okay, the treasury is really going to do this. They're going to make sure things go. That's strong for the dollar. It's strong for Bitcoin. I mean, it's strong for gold, strong for Bitcoin.

18:58So this, I think, was the right play to go because if you wait till it goes all the way up, that would be a huge run for this name. It paused where you'd like it to pause and it moved where you'd like it to move. So I thought it was really bullish.

19:12Ed Carson:Yeah. It didn't catch the early turn, but that was another potential buy point here when it really first started moving above the 50-day line that happened on 8-5. And we know our very own Scott St. Clair has been playing the group with AEM. So looking at one of the individual names there to play this space, started making a turn now above the 200-day line. and look at that up 11 % on the day. I didn't want to take that single stock risk. So opting to play the group with the ETF. And since it isn't near any of its moving averages using a percent stop, a dollar risk type situation here with this trade, but definitely breaking a downtrend, getting above those major moving averages.

20:07Ed Carson:And like you said, I like how it paused a little bit So we'll have to see if it can start taking out some more of these marked highs. It did around the 90 level. And then next up ahead would be that 98.74, 102.39. If this trade can keep working, we can also take a look at the weekly chart at the relative strength lines. We saw this sit out quite a while ahead, right? Relative strength was definitely relative weakness. But in recent weeks, seeing a turn here, the relative strength line measuring price performance versus the S &P 500 is still well off highs, but it has recaptured its moving averages.

20:47Ed Carson:So looking at that crossover type action there, something also worth mentioning. Yeah, a lot of reasons why you could have made an aggressive action today. Okay. Well, we started with that one instead of finishing with it. It was just kind of a natural segue there with all the other ETFs. Let's go to a health care name, Oscar Health Ed, up 3.3 % on the day. Had a gap down pretty recently, but I would say the recovery has been pretty swift. Yeah. So I think there was some confusion about the earnings. And obviously, the market decided, you know what? They weren't so bad. And the market also got better for others.

21:33Yeah, I broke a trend line, so that could have been a way to buy it. Now it sort of seems to be making sort of a rough handle. I mean, technically, you could probably call this some sort of base because it didn't close above the left-hand side. I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm. At Baird, our 5 ,000-plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets.

22:13Learn more at rwbear.com slash wsj. You know, I mean, this is sort of treat that as a handle. I mean, just sort of it's a messy pattern. It's a messy double bottom. There's all sorts of things you could do with it. But I like the action it's done. The ReloStrength line has held up reasonably well. This is the growth has been really strong this year. I mean, obviously, it's a rebound year. The growth is supposed to slow down next year, but it's weathered things well. I think this is the strongest name in the health insurance space. So I think that's just another way to get out of that. This one's had a nice move.

22:47It's paused. It's sort of like pausing. If you look at that, it's a whole messy, long consolidation. And a lot of the consolidations have been messy. This one seems tight. A lot of the things have been sort of messy along the way, but this one is relative. And again, on a daily, it looks a little messy, but you look on a weekly, it's like, that's not that deep. You know, when you compare it to what else you see, it's, and, you know, there were some big up weeks, the down weeks, there were some support or bounced off. So there's a lot of positive action, I think, in this one. So I think if it gets, there was some buy points earlier, but I think if it gets above some of these, the highs that's getting at, it would be another entry.