Blue Chips Lag Mixed Session As Yields Rise Again; Dell, AEM, Taiwan Semiconductor In Focus

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0:40Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, March 11th. It's Alyssa Coram here. A mixed session on the day with blue chips lagging as bond yields spiked again. And joining me now to break down the action in today's session is my colleague, Ken Shreve. Ken, good to see you. What do you have for us?

0:59Alissa Coram:Yeah, lots of moving parts to this stock market alley. Want to take a look at two tech stocks? Let's take a look at Dell, D-E-L-L. Also Taiwan Semiconductor, which reported pretty good monthly sales yesterday. And then in the gold space, good stock here, Agnico Eagle Mines, A-E-L.

1:20Ken Shreve:All right, let's get right to it. We'll NASDAQ. The loan index up on the day and just fractionally less than one-tenth of a percent. Meanwhile, the S &P 500 on the day down less than one-tenth of a percent and the Dow down six-tenths of a percent on the day and the Russell 2000 down about two-tenths of a percent here. So we are in a rally attempt. Let's have you take a look at the NASDAQ first, Ken.

1:53Alissa Coram:really almost a mirror image of yesterday we uh really the bar looks almost exactly like what we saw on on tuesday so we weren't able to hold a decent gain so a little bit uh a little bit disappointing there but uh we were able to close a little bit higher today we did have uh lower volume than the prior session. But yeah, lots of moving parts to the market. We had a very tame reading on inflation before the open. It was really a non-event. It came in exactly as expected, month on month, up three-tenths of a percent consumer prices, and then year over year, core prices up two and a half percent.

2:42Alissa Coram:That was exactly as expected. We did have a big jump in oil prices. We're seeing a lot of volatility in oil prices. In electronic trading, oil was up around$88 a barrel. You can see USO today was up, you know, 2 percent. So lots of volatility in the oil market. Not much new in the way in terms of news from Iran today, but You can see oil up for the second straight session after that really volatile session on Monday. The real issue to me is just this bond selling that's been going on because we have really seen an upward spike in interest rates here. When I see oil prices rising like they are and then this upward spike, you see the 10-year yield today moved above that 200-day moving average.

3:40Alissa Coram:So typically rising oil prices, rising bond yields, that's not going to be real friendly for the inflation picture, not real friendly to the stock market. So overall, I think the market held up pretty darn well today, considering we had this big spike in interest rates. I mean, that 10-year Treasury yield looks like it was up seven basis points today. I'm seeing it up around 4.22 % right now. So, yeah, this spike in interest rates is a bit of a concern. And, again, the inflation data this morning was fairly tame. Nothing, no big surprise here. So a bit of a curious inflow into bonds here that's causing these rates to spike here.

4:29Ken Shreve:No doubt. And once again, if those of you out there watching this for the first time, or at least for the first time with these charts, I'm really a fan of the dynamic nature of our new market surge charts. You're able to zoom in and out to really get that longer term perspective. Or if you want to, instead of getting out your magnifying glass, you just zoom on in to take a look at the recent action. So I'm a big fan of that. All right. Moving on, Ken, let's take a quick look at the small caps. Why don't we? Still below that 50-day line. That's a key level.

5:12Alissa Coram:Yeah, for a good part of the session, it was blue chips and small caps that were lagging. It actually ended up being a decent close for the Russell 2000. It did close off lows today. This is sort of the lagging index at this point. It's pulled most off its high, at least compared to the S &P 500. But decent close off lows, a nice reversal off lows on Monday for small caps. So this is the third day of a rally attempt for the Russell 2000 here. And, you know, a decent close off lows today. So, again, it was lagging right along with the Dow for a good portion of the session. So we'll take it. But, again, the selling really has been concentrated in small caps here, but not a bad close for small caps today.

6:09Alissa Coram:Dow Jones, boy, a lot of the selling in blue chips was focused for a good portion of the session in Goldman Sachs in particular. But Goldman actually had a decent close today. Financials lagged for a good portion of the session. And home builders also lagged. So most of the selling by the close in the Dow was in names like Sherwin-Williams and Home Depot. So the Dow ended up, I think, down about six-tenths of a percent. It was the worst performing index today. So Sherwin-Williams, Home Depot were the laggards in the blue chip index, but blue chips were definitely the laggard today. And again, the Dow, right along with the Russell 2000, that's sort of the lagging index at this point.

6:55Ken Shreve:So you mentioned the rally attempt. So let's take a quick look at the S &P 500. We're primarily focusing on that as well as the NASDAQ for this rally attempt and the follow-through day watch. So we are on day three. Day one was that big reversal day to kick off the week. And now we could be in position for a potential follow through day, which IEPD's research and rules around that show that day four of a rally attempt is the earliest you can get such a kind of day can. And why don't you walk our audience quickly through what else, other than just time that we're looking for from a low, that we want to see as more of a confirmation that the tides are shifting for the better in this market?

7:50Alissa Coram:Well, I would say the one thing that we have going for us at this point is that we really have very little in the way of sell signals from leading stocks. You know, we've been talking about how well like the big leaders in the data storage group, for example, you know, they're really forming bases. A lot of them are kind of sitting right at their 50-day moving averages, their 10-week moving averages. So there's actually a fair amount of good setups out there in the market. So if this market rally is going to continue and if we do get a follow through day, there do seem to be a reasonable amount of setups out there that are there, you know, stocks out there for the for the picking, which is which is good because sometimes if you get a follow through day, sometimes there's not a lot out there to buy.

8:44Alissa Coram:So you get this sign of strength by the market and you just have really slim picking. So, again, for the leaderboard model portfolio, Dave Chung and myself, even yesterday when the market was rallying, we were looking and saying, boy, you know, there's a lot of merchandise out there, a lot of stocks, you know, getting support at their 10 -week moving averages. We were pretty encouraged yesterday, even though it was only the second day of a rally attempt. So as long as the Monday low for the S &P 500 holds that upside reversal on Monday, the rally is going to be intact. If we undercut that low, which is basically right at the 200-day moving average, if we undercut that low, the rally is going to be dead.

9:29Alissa Coram:And then we're just going to have to look for the first day of a rally attempt. So we look on day four or later because we want to let the short covering kind of run its course. So we start looking for a follow-through day on the fourth day or later. And it could come on day four. It could come on day six, day 10, even later. But I would say that the market of stocks right now, there's a lot of stocks out there still acting quite well. So that is encouraging. Of course, we've got a lot of crazy headlines coming from all different directions, which is making the market chop quite difficult to navigate.

10:16Alissa Coram:And you can see this, the NASDAQ, it came pretty hard off of that high of around 24 ,000. And it came down with quite a bit of volume. So there's some distribution that the market is kind of trying to work itself through as well. So it's still challenging out there. But I would say that leading stocks overall have come through this distribution phase pretty well. So we should be prepared for the possibility of a follow-through day. They often come when they're least expected. We know that. They often come when the headlines are very negative and when sentiment is often quite bad. They come when they're least expected, basically.

10:59Alissa Coram:So we'll keep watching for one and appreciate the solid action in growth stocks that we're still seeing by and large.

11:09Ken Shreve:Yeah, that's huge. It's really key. So glad you mentioned that, Ken. You also wanted to take a look at RSP today?

11:19Alissa Coram:Yeah, this is just an area, just one kind of yellow flag. The breadth in the market has started to deteriorate. There was a period of time where the breadth on the NYSE was really doing well. We had seen the breadth on the NASDAQ deteriorate well before breadth on the NYSE. In had been trending higher and doing quite well. And the breadth on the NASDAQ, the tech stocks had started to sell off, and the breadth on the NASDAQ started to weaken well before breadth on the NYSE. Now we're seeing the breadth on the NYSE starting to weaken. So RSP has started as now below its 50-day moving average. But you look at the QQQE, which is the equal weighted version of the NASDAQ 100.

12:16Alissa Coram:Well, that broke below the 50-day for some time. So that has revealed weak breadth in the NASDAQ 100 for some time. So RSP, now that that's below the 50-day, we've seen that that weak breadth sort of spread out into the NYSE. It's not a total deal breaker here, but we have seen that that weak breadth start to spread onto the NYSE as well. So, breath today, not too bad. It was negative on both exchanges, but it was negative by less than two to one. So, it wasn't terrible. But just noticing that breath starting to spread over onto the NYSE as well. So, we'll just continue to monitor that.

12:57Ken Shreve:Absolutely.

13:02Alissa Coram:What's driving the markets this week? What's on investors' minds as they look ahead? Find out on the Markets Podcast from Goldman Sachs. A breakdown of market moves and macro signals in 10 minutes or less. The Markets Podcast from Goldman Sachs. Listen now.

13:28Ken Shreve:Okay, let's take a look at some individual names starting with Dell Technologies. working on a cup with handle and an early entry, maybe for some folks today with clearing a trend line within that handle. That's something that our chief content officer, Chris Gessel, that's a setup that he really likes, but the catch is market conditions kind of need to be better for a lot of buys out there until we get a follow through day. That's sort of the other thing to mention can remind folks. I know a lot of folks out there know this, but that's a buy signal that a lot of us use or just a little bit more confirmation that the odds are in our favor when we're buying.

14:13Ken Shreve:So if you're in a market correction or a choppy market where you don't have that signal, new buys can be treacherous. So we've got to be careful and we're watching new setups. So this is a setup that we are keeping a close eye on, especially with that explosive move after the earnings report that really has helped forge this right side of the base. Yeah.

14:39Alissa Coram:I mean, two weeks ago, if you had asked me if this stock had the potential to be considered for the leaderboard model portfolio, I would have said no way. I mean, it was in the middle of a really ugly correction. It had pulled back sharply off highs, trading below the 120 level. It was being sold hard by institutions, and it just really wasn't looking good. And then all of a sudden, they come out with this earnings report that really caught the street very off guard. And that can happen. You just come out with a quarter where the execution is flawless and the outlook just catches everyone off guard.

15:25Alissa Coram:And that's why the stock gapped up so strongly and crossed the 140 level. And when you look at the results that they reported for the March ended quarter, Dell is on a different fiscal year. but you can see the material acceleration that took place here. The earnings were up 45 % year over year. The revenue was up 40 % year over year. And now you have a stock that's setting up in a base here. So we put this on the leaderboard watch list. We think that if the market can hold itself together here, this one has a chance of working. Now, not only was the bottom line and the top line growth impressive, but they also said that their server revenue for their current fiscal year, they're expecting it to double, to be up more than 100%.

16:33Alissa Coram:And this is AI servers. So Dell is not a PC company anymore. That's what they used to be. They still have that business, but they are big into AI servers now. And so this is a company that is just growing in a new business. And we're going to keep an eye on this. And if the fundamentals are indeed turning here and this company is in a new growth phase, which it does appear to be the case. We want to pay attention to companies like this that are capitalizing on new conditions in their industry. So the latest earnings report was super impressive, and we're going to just keep an eye on this base that's taking shape, a relative strength line that looks a whole lot healthier, and we'll just continue to watch how this sets up here.

17:28Ken Shreve:Let's go on over to AEM. Agnico Eagle Mines finding support at the 10-week. What do you think about this chart here, Ken? I know a lot of folks have been asking us about stocks in this theme.

17:45Alissa Coram:Yeah, so Agnico, definitely an institutional quality name. The trick in gold is that there are just so many great gold names out there. Agnico is certainly an institutional quality name. It's got a nice big market cap. It's very liquid. You can see that the breakout over 187.50. And I believe this one is in a buy zone right here as it comes down and tests the 50-day and the 10-week moving average. If you go back to the weekly chart, you can just see it's kind of sitting right at its 10-week moving average here. Tried to go down today, closed up near its high. So this is just a nice little second test of the 10-week moving average.

18:33So for some gold exposure here, it's just a good high-quality name.

18:39Alissa Coram:Fundamentals are solid. Fundamentals are really solid throughout the gold group. There are so many stocks that have composite ratings of 98, 99 because they've got that good top line and bottom line growth. But the fund sponsorship here is outstanding and just a great institutional quality name in the group. And the technicals and fundamentals here are still aligned and just like the 10-week support here.

19:09Ken Shreve:Yep. Looking good. And let's round things out with an update on Taiwan Semiconductor, a new leaderboard name. Isn't that right, Ken?

19:21Alissa Coram:Yes, indeed. And almost a similar look to AEM. And again, this is again, we're talking about some of these leading stocks in the market and just have a lot of setups that that that look like this breakouts that are holding showing support after after the breakout. So just like AEM, Taiwan Semiconductor, this is the world's largest chip foundry. So they make chips for Apple, AMD, Broadcom, NVIDIA, you name it. And another case of just good supporting action at the 10-week moving average. We did put this on the leaders list yesterday on Tuesday. Not the first time it's been on the leaderboard. We've done well with it in the past.

20:05Alissa Coram:another institutional quality name with just exceptional fundamentals you can see on the earnings and revenue below the the growth is just spectacular they reported monthly sales yesterday up up 22 so just a really consistent track record of growth and you can see the annual earnings have just been very, very consistent. Nice move above the 50-day moving average on Monday, like a lot of other stocks. And on a down day for the market, this one continued higher, had a decent close. So hopefully our entry yesterday will be a good one and this support will continue to hold here. So another leader getting support where it should and looking good here.

21:00Ken Shreve:Great. All right. No notable earnings after hours, Ken?

21:07Alissa Coram:There, you know, I was winding down. Yeah, I was looking, you know, I was following, there was a gold, a gold miner, you know, since we looked at Agnico Eagle, A-R-I-S was a gold producer. It's fairly thin. I'm not sure it's going to be trading in after hours, but A-R-I-S Looks like, yeah, maybe that is making a little move. Another gold name with a composite rating, a pretty, pretty strong composite rating of 99. Testing its 50-day moving average. Looks like this one is at a 6%, 8 % gain.

21:43Ken Shreve:Yeah, I'm seeing multiple sources showing an 8 % gain after hours.

21:47Alissa Coram:Yeah, so that's a gold stock, but fairly, fairly quiet, fairly quiet in after hours. but that was a gold name that I was watching in After Hours. So that looks to be higher, but that was about it. Pretty quiet. Good stuff.

22:05Ken Shreve:Well, you know, sometimes we can use a little bit of a break from the earnings. Before we know it, it'll ramp back up again.

22:13Alissa Coram:We have Micron next week.

22:16Ken Shreve:See what I'm saying? Yeah. There we go. All right. It never ends. But in a good way. This is what we live for. We love this stuff.