Chopped Up, But Set Up; Apple, Dell, Dutch Bros In Focus

27:40This looks more like the RSP, where it's trending nicely and it does kind of feel like, okay, it's getting up there. The big institutions stop buying that and then start moving into something else. It settles down and then it moves back up. So that's an important thing to note on stocks, too, because I although I always talk about the 21 day because on balance that works that, you know, the best for me over lots of different things. I would use other moving averages, find the moving average that an instrument likes to follow. And one that I'm going to do after the show, I'm jotting myself a note down, is to put the 34-day on there and give that a shot.

28:24Because I think the 50-day is a little bit too late, but putting a 34 exponential on there and then seeing if it's abiding by that. And if not, then you kind of have to use the 50-day. Very good. Let's go ahead and get into some stocks. And we already touched on Apple a little bit, but just to kind of put a bow on this one. It's base building. Yeah. Yeah. And it was base building and it kind of moved out right after earnings and still not broken like it was back here, right? Yeah. And that's really a – it's a double bottom. And I had ridden it off, right, because I just have a negative bias towards their, even though I'm in their ecosystem and I'll never get away from it.

29:11And I use the Apple Watch and the iPhone and I've had one since the first phone and I just keep on. But they're never, once Steve Jobs left us, rest in peace, what a great man he was from as far as innovating things. You know, Tim just hasn't done anything as far as I'm concerned that's impressive at all. Now, they're going to finally be coming out with the flip phones and stuff that other people have had. Maybe that will be the game changer. They did some changes with their prices, which I think is actually smart. Because if you have something, people who want an Apple or a Mac are going to pay up for it.

29:48So you might as well increase the price. That's the way economics works. So that's probably what's going on. but also just this rotation of just the big, you've got to realize, folks have got to realize that the big players out there, they have a huge handicap. We can all go to cash. We can go 200 % long. We can go 200 % short very easily. They're stuck at being 97 % invested. So it's very easy to get in and out of an Apple or an NVIDIA or Google or what have you, but it's really hard for them to do it on, you know, on a much broader base if they want to move quickly. So I just look at this one as more of a positive for the overall market that it's looking nice like this.

30:31But it's not the Apple that it once was, but hopefully it will be again. Yeah. And speaking of a blast from the past, Dell, of course, that went private, came back public and has been a big player in the AI space. This is back above 400, making itself comfortable there. I do have a position myself. Go ahead and talk about Dell. Yeah, and I'm pretty sure I closed down my brokerage account, but I'm pretty sure I still have a position in it. I've been trading it, and I like that it's set up like a high-tight flag. So it's in the spirit of a high-tight flag. What that is is a rapid advance over a short period of time and not giving up much of that move.

31:11So when from the 153, or you could pick around 200 or so, there's different ways of looking at the flagpole. Let's go to the weekly because it's a little bit easier to see on that. And it's important to understand the concept of a flag. Don't get bogged down into the number of weeks that it has to do or the percents or anything. you should be able to visually see it and just go, does this have the concept of a rapid advance and then not giving up much of those gains? And it has that in spades. But on top of that, it's holding up in the midst of this market where a lot of other things have been selling off.

31:50Like let's pull up HPE because that's one that we were talking about in a general same space on TV or on IBD Live earlier today. And you can see how much, yes, they got supported at its 10-week line, but how much further it came down after that rapid advance. Let's go back to Dell, not giving you that sense that it's holding up there. Think of the psychology of that. You've got these big players in there that had bought it at$150 ,000 and kept on buying it on the way up. And now it's up here in the$400 ,000 and they're not selling it. And anybody shorting it isn't able to push it down. And this is a perfect looking basing area, given the context of the market.

32:36And the way to see that is with that RS line. I think this is one of the best looking things out there. And I'm really upset because I think I might have sold mine. And I'll have to buy it back. But yes, it was down today and all. But it looks set up, at least on a weekly basis, that I think if Bill were with us, that he would be all over, you know, all over this one and probably be in it or at least stalking it. Yeah. And Michael Dell is just a great, like, he's great at business, right? And he started off, I think, in his garage, like all of them did. Or a dorm room, I think, in college or something like that.

33:14Yeah, dorm room, yeah. And he's out in Texas where I'm out in Chino at my folks' house right now. And he's like, I don't know. I don't have time for college. I'm just making, you know, trying to get this business going. Yeah, think about all of them that did. Steve Jobs, I think, dropped out. Zuckerberg dropped out. Yes, I'm talking about you. Bill Gates, like lots of them that really started special things. You know, that's a whole topic for another day. But this looks set up, and I really like that the earnings and the estimates look solid. Yeah. Now, going to a kind of outside of tech, we have Dutch Brothers.

33:53And, you know, we were talking about Brinker today on IBD Live. Dutch Brothers really, this is an example of something that has not participated at all. You see that with the relative strength line that you were talking about, the big, bold blue in a downtrend. But it looks like that relative strength line kind of broke its downtrend. It looked like it was starting to get some traction. But then this week, kind of an ugly start to the week. Was this enough strength to counteract that, to end the week? Well, I do have a position in it that I've been trading it, got kicked out of it, and then I bought it back a couple days ago and was adding to it today.

34:39Is this a good-looking chart? It's not a good-looking chart. I mean, that's just the reality of it. there was an entry point there with coming, you know, that, that upside reversal. Was it a beautiful one? No, but I'm playing this more from, I I'm looking at Dutch bros from a fundamental standpoint and kind of how, like what Bill did with, with a price company, which was like the Costco early on, you know, he looked, he went into one of the first stores down in San Diego, I think it was. And then price club, price club. Yes. I'm sorry. I'm sorry. I'm getting old, Justin. And it was just he he charted it out and waited for an entry point on there and kind of manufactured this weird double bottom thing.

35:28And that's kind of what I'm doing here. I'm trying to find a toehold in it. It's not a good one. But the concept I'm looking at this is In-N-Out that's public. You know, if you're on the West Coast, you know what In-N-Out Burger is. If you're on the East Coast, you've probably heard about it. But it started off as this very small footprint store where you just have a drive-thru, and that's what the Dutch Brothers is. Now, there's other smaller places out there that are doing this, but I think they're really tackling the Starbucks of the world that have a big space. And then they've got different just different economics when you have a big footprint and a lot of workers there versus a small little shed with like three people.

36:11And they're very friendly, just like the In-N-Outs or the Trader Joe's or the Costco workers of the world. And so it's a good experience. Terrible looking chart. It really is. But, you know, at least I have an expectation. If it doesn't stay above today's low, you know, I'll be out of it. And then just looking for a new entry. And we just kind of wanted to bring something up that wasn't an AI stock and wasn't a nosebleed stock and just something else, because some of these are making moves. Like, let's just quickly go to, what's one of them? Cheesecake. Cake, yeah. Cake. We talked about that earlier this week.

36:49You know, that is up and out of there. And it's one that was kind of, you know, not on everyone's radar. I should have been in that. And then Crocs, another one. Yeah, I do have a position in this one. But so these non-AI type of stocks that the charts don't look beautiful, but it seems like there's some money rotating into it. So just keep an open mind to that. And I think you brought up the Brinkers earlier and that had a big move. You've got Texas Roadhouse that's setting up. So you don't have to just stay in the space of all the chips. You can, you know, broaden out. I want to go back to just a couple of areas.

37:29I think we were starting to talk about hack and we got distracted because, again, one of the areas that we saw some money come out of today. Again, restaurants, you know, a number of these were doing well, Crocs. But Hack, which I do have a position in, this has been one of the standout areas in the last couple of weeks while the market has been kind of a little iffy. And a hard hit today, a hard hit in some of the software stocks, some of the computer enterprise software stocks that were doing okay. And of course, as we mentioned, kind of at the outset, XBI, which I do have a position in, taking a hard hit today after a nice run lately.

38:12So what is this kind of saying about that rotation side of things? It is frustrating. There we go. Because I have hack as well. And it is just frustrating. And it's so reminiscent of that October to April that it was just looking. Let's go back to the hack. It looked really good yesterday, but it didn't break enough today to have to sell it. Like you could reduce it. But if it would have taken out to yesterday's low, then it's like, okay, then you kind of have to exit it. But at this point, it's bent but not broken. And it could hopefully just go in sideways, maybe stay within today's high and low for a few days and build a shelf or something to move off from.

38:59because, you know, and let's go to like PanW. You know, that was one that I'd been watching in this general space.

39:10And yeah, and you know, you had that bad break of a couple of days and then yesterday it looked great. Like it wanted to move up. And then today you're down 3.67 when the market is, you know, up. So it's frustrating, but it's not broken. So you've got a lot of that going on. And I saw a lot of that in the XBI world that you were talking about, like I couldn't figure out like, why was that selling off? And I kept asking people for the news. Someone tell me, give me a reason. But it's just sometimes the money just stops going in an area. It could just be a big fund is like, hey, we're selling off our XBI and they just do it quickly.

39:49And then it snowballs. You don't know. Like there could be some big news item out there that we just were too busy and we missed. Yeah. I'm going to go ahead and turn the charts over to you. One thing I'm just going to do while you're pulling yours up, I'm just going to go to the technical indicators. I'm going to go to moving average, and let's throw on a 34. A lot of people are asking, why 34? And, of course, this goes back to Fibonacci numbers. You know, if you just want to Google that, you can figure out what those are, and you can calculate them yourself. but something you use quite a bit.

40:27But yeah, here's that Fibonacci 34 number and you can see how IWM, pretty good. Pretty, yeah, pretty good. Yeah, so I always start off with, once you understand the power of a Fib, you use it in all things in life. It truly is really a powerful concept. So you can Google it. Maybe I'll do something on it in the future. But start off with all of those numbers so we don't have to rattle them off. You can Google them. And those are your base case. So now people will say, well, why do you use a 50 instead of a 55? Because a 55 is a Fib number. And the reason being is you want to know what other people are using.

41:20Everyone uses a 10-day. Everyone uses a 50. Well, not everyone use it. People who short-term traders use a 10-day simple. So you kind of want to be aware of where that is. Everyone uses a 50-day simple and everyone uses a 200-day simple. So with those, you want to have them on your chart, even if you don't think they're the best moving average around to use, if that makes sense. Let me shoot. And I will say that I got interested in the Fibonacci and golden ratio. So again, that's another thing for folks to look up. I think it was the Dan Brown book that I read. I took a deep dive on Golden Ratio, and I was just fascinated by that.

42:01Was that in the one that they made the movie with the Tom Hanks? Yes. Was that that one? Yes. Yeah. I listened to that book back when I used to commute, and that's a good one. So tell me if you can see my charts. I can see it. Okay. All right. So we're going to start off with – I'm having a little trouble with this. Okay. We're going to start off with our take a step back, Bob Weir style, and look at a weekly candle. And the way I like to look at all of these charts, if you're relatively new to a Friday SMT, is I look at each one in isolation. And I'm trying to paint a picture to myself, a mosaic, if you will, of what my expectation is.

42:40Not a prediction, but what my expectation is for normal and natural action on the next bar or bars. And this, if you've studied candles or any charts at all, like this looks like it wants to blast higher. That's just what it looks like. Why do I say that? Because you've got a blue candle, meaning that you close higher than you open, which is a very positive thing. You've got a tiny top wick, meaning where it traveled to, to a high, and a long bottom wick. That's as beautiful of a candle as you can get near an area of resistance. Does it mean it's going to break out? No. So should it break out?

43:18Yes, and that would be normal and natural. Now we're going to look at the NASDAQ. Same thing here. You've got, instead of more of a horizontal area, you've got a downtrend that it's up against, and you've got that same beautiful looking candle on there. So first thing, you know, first charts, good. Now we're going to go to the next one. The next one, these are our regression lines, And we had started that out on the follow through day. And then we went 50 days after that. I think that looks like June 17th, if I have the right date in there. We gave up on these sometime around here at the end of June because it was now living underneath our one standard deviation of that green line there.

44:04So what we're looking for is a new channel. So we don't have that now, but sometimes it can break back into the original one, but We're not going to use it anymore, but it's just something to always be aware of because it's kind of funny. They can sometimes when they go back, they'll just hug that bottom, not all the time, but they'll hug that bottom one standard deviation and then just grow at a different pace. And let's do the same thing. You use the follow through day as your starting point for that last one. Yeah. What's going to give you a starting point for the next one? Wow. That's such a good question.

44:43Because what I was doing with this was when you have a big intermediate correction or bear market using the follow through day to start, because that's kind of where when you have a major shift, because if we would have started it down here, let's just see what that would have done. But you would have started it off the bottom. You have a completely different angle and a much wider type of timeframe. So at least where I'm at right now with my research on this would be starting it off like here at the bottom of this because you don't want to start it somewhere in your last channel. You want it once you gave up on the channel, finding a new area.

45:25And so since this wasn't a major correction, just a mild intermediate correction at this point, I would be using the June 26th date. And then once we have enough days, maybe 35 or so days, I'll start plugging it in there, assuming that we're moving up, and then cap it at 50 days, if that makes sense. Absolutely. Although I don't know why you would use 35 instead of 34, but that's a different story. Yes. Actually, a very good point. So same thing here on the... Gosh, the jump in a lot. I'm paying attention. You are the best. Okay. So then here it is on the NASDAQ. And again, the same basic concept there.

46:06It was dead in the water. That was just an old one. We'll skip this. And now the 50 % retracement. And so this you can do all sorts of different ways. I'm using the high from June and the low from June and saying, are we living in the northern hemisphere above the yellow line or are we living in the southern hemisphere below the line? And so we want to be up in Norway. We don't want to be, you know, I don't even want to throw any countries under the bus, but we want to be in the Norway zone. Yes, I'm finally getting into sports, maybe just, you know, for one more day. So that's a good thing. And anyone who knows me knows I've never watched a sporting event in my life, if I could help it.

46:46Same thing here with the NASDAQ. It's back at the 50-day. We really want it living up in this area to be healthy. Now we'll move on to the next one. who's going to win tomorrow, Justin? I'm actually rooting for Norway as well. There you go. Because you're like in that area. Like, where are you from? You're from France, right? Yeah, something like that. My dad is from Denmark. But yeah, Norway is close enough, the Viking heritage. But it's my wife because she just loves that goofy dude. Yeah, he's so cool. That's why I like it because I watched the footage of him off the field and he's just so kind to all the little kids and stuff.

47:32And that's why I'm a fan of him. I haven't even watched him play besides the highlights. Okay. Don't get me distracted. This is a stock show. So here are the levels that I'm looking at. And so the green one is at the high from June 15th. Wanted to take that out. And then if it goes through there, then you expect it to go to the next one, which is the highs. On the downside, this is kind of tricky which one to use. And so, you know, the 729, it really should be there. But I think, you know, we've got, yeah, right there would make more sense. But the one that I'm more concerned about is the June 9th low over there.

48:15Then you would have lower lows if you take that out. And then, of course, this area over here around 702. And then way down here at the follow-through day, if we get down there, we're in a world of pain because we'd be underneath the 200-day. But you always want to have a final line in the sand on the chart, not meaning you'd be in the market down there, but then you're looking at a serious bear market if you get down in that level. Similar thing here on the NASDAQ. The lows from earlier this week are a place that we don't want to go through. and then the same thing, the highs over there from June 16th.

48:50Let's move on to the next one. So here, this is a bunch of fibs. So we've got the white line there is our current price. Instead of a candle, it's just a line chart on there. And then it's stacked the proper way now. I'm on my laptop, so I don't have my indicator on this code, but it's the red one is your three, you know, all the way down through all the different numbers. So you're three, you're five, you're eight, you're 13, and so on. And you want to see it fan out like this, where each one is above the other one. And that's how you start a nice trend like you had over here. Does it mean it's going to do it?

49:30No, but so far, everything we're seeing has been very positive. And then the same thing here with the NASDAQ on there, where your line is up there. Let's see the IWAM just for fun. So that's not as good because you can see that the white line is underneath a few of the shorter term ones. Let's look at the RRSP. And then that one is stacked properly, but it's just starting to, you know, the white line, which is our current price, just moved back above its shorter term moving averages this week. So that's a good thing. Then let me stop sharing here. and I'm going to share the next one. Just one second, because I am having trouble with my PC.

50:13Just give me a moment. It's tougher doing it all on a laptop. It really is, right? Single screen, right? Yes. It's just like, oh, I missed my doubles. Let's see. Okay, can you see this? Yep, there we go. Okay, so here we've got Spy and the Webby RSI, which is the histogram there at the bottom. And all that is, we'll just blow this up. That is your low versus your 21-day moving average on their Express's ATRs. And the way to interpret this is you want to see a wall of blue like we had over here. That's where you're going to be making your money. And how do you start a wall? Well, one brick at a time.

50:54And that's what we're having here. We don't have a wall yet, but we've got a little tiny baby thing that's building. So you've got to start somewhere. And so we want to see this build. And it's not going to have to look as strong as this because this was the beginning part after that really bad move underneath the 50. But you just at least want to get it up into the one, maybe one and a half ATRs above it. And really a wall of blue. Let's look at the NASDAQ. Oops, different symbol on this platform. Oops, IXIC. And we don't even have, we have like one little baby brick there, you know, a Pink Floyd brick, but we need a little bit more than that.

51:36Let's take a look at the RSP. That's been looking much better. We'll take a look at the IWM. You know, not really there. Let's look at the EQAL, which is an equal weight of a thousand stocks. So it's all in this thing where we could be at the very beginning of something. It's certainly we're not late. And let's go over to the next thing, which is the Bob Marley off high. The way to interpret this is this is measuring how far off your high you are in terms of ATRs. So the green zone is within four ATRs of your high. Yellow is four to eight. And then your red zone is underneath there. And the way I use this, and actually we should use the VOO because that spy had a bad one, is when you're looking at your first pullbacks is saying, okay, that is the character of that instrument.

52:33You can use this on individual stocks, and we are going to be putting this in market surge as soon as we can, as well as WebE-RSI. But so here, it came down to about four and a half ATRs off the high. And then this pullback we had afterwards was less than that. That's very constructive. That's what you want to see. It could have even come down to that low and still been fine, or sometimes it'll poke a little bit below it, but you don't want to see character changes. Let's see what the NASDAQ looks like using this. Same thing there, holding up there where this low is above this one. It means it's tighter.

53:10And let's look at the IWM for fun. That's looking healthy. Let's look at the RSP. So this one here was down a little bit lower, but that will happen, but it's still looking normal and natural. And this is a good way to compare a stock against itself. Now, Sandisk isn't working on this just because of the timeframe, but let's just look at Micron because this has enough data to calculate it because I think I go back 18 months or on this version of it. But here, it just got a little bit worse with this pullback than these over here. So it's another lens to just say, you know, it's not totally broken.

53:55This one over here, that's in March, that's where it was really different and out of character. But at least through this lens, it's still within character of how it's been trading. And so you can use this style on all stocks. And that's what we have for you. It's not even an hour. So how's your baby doing? Not your baby, but your grandbaby, Justin. Everything's doing fine. She's been actually hitting the beach. Oh, really? Yeah. So a lot of yellow polka dot bikini pictures that I've got. Oh, that's awesome. And how old is she now? She's going to be a year next month. Oh, my God. How did that happen?

54:35I know. Well, and let's see, just a few more things. Oh, so you don't want to talk about kids. So you want to stick on it. This is a stock show. Okay. A few more things that I do want to bring up just because, again, we have a little bit of time. The sectors. You know, we talked a little bit about the hack, the XBI. but a lot of people are also looking at some of the travel area, the jets, you know, and the oil related, because, of course, with, you know, all the headlines with Iran, oil starts getting a little bit more volatile. So I just wanted to kind of get your thoughts on that. Again, you already said it.

55:15You can't use headlines as a reason to not invest in something because they're changing all the time and everything. But what's your kind of take on that volatility that is somewhat headline related? So the reality, I'm speaking to myself now, so hopefully I will listen to myself. This time. This time, when we're in this type of chop where we're seeing this rotation where HAC looks good for a couple of days and then it doesn't. And XBI was looking good for a long time and now it doesn't. And then, like you said, the Jets, like, you know, I was looking at Southwest Airlines and, you know, that was, you know, setting up and some other ones that already broken out.

55:59And then you have that headline risk. So I really think with the S &P looking as good as it does right now, that just trading that, and I do have a position of trading heavier with, and we put on UPRO for that reason on Swing Trader, because it's like if that is the instrument that will benefit, and we have the RSP as well for that reason, when you have all this rotation from sectors, but the broad market is looking good. And I would kind of consider the Qs kind of like a sector because it's more tech. You know, it's just a different way of doing tech. Whereas SPY has got everything, even though it's heavy bent on tech, obviously, because of the market cap and all of that.

56:43I would just go heavier with SPY or whatever your favorite way to play the S &P is, whether it's UPRO or a double or a VOO or what have you. I think that is the better way until we don't have this rotation out of the blue. And yes, you know, you have that headline risk that is impacting the travel stocks. But on balance, they are still looking good. Like, you know, Airbnb isn't really, it's travel and it's not travel, you know, and that is looking set up. And so, but still, I would think more, you know, playing it at this point, kind of heavy, you can kind of go heavier on the SPY because then if this breakout doesn't happen, then you can back away from that.

57:29Whereas you might have the breakout happen, but you're heavy in HAC or you're heavy in SMH or DRAM or you pick your favorite sector and then that one isn't going. That becomes very frustrating. frustrating. So I think at this point in time, if we're going to have another leg higher, having a core position in a SPY-related or something else, even like the total world indexes look good to me. I think it's VT or VTI or something like that, that is just broad-based market cap. There's nothing wrong with doing that too. Very good. And as a reminder for folks, Folks, next week, Mike and I are going to be back on Tuesday for a Swing Trader status update.

58:14Of course, you can catch Mike on IBD Live throughout the week a little bit more often lately. So that's been a nice change for folks. Well, I don't know. It depends if you like listening to me or not. That's true. So it's debatable that not everyone is happy about that. But I am going back to – right now I'm on Wednesdays and Fridays again for a while. I was just on Wednesdays. I'm going to be going back to Monday, Wednesday, and Friday. But I do have some vacation coming up. So I will not be on SMT, I don't think, for the next couple weeks. But you and Allie will handle it. But I will be on IBD Live, I think, on Monday.

58:54And it's my father is turning 81 on Monday, and my mother is turning 80 next Thursday. So just big, big happy birthdays to the best parents around. Someone else has a birthday coming up. Oh, man, I'm going to be 55. We don't need to give those numbers. How did that happen? 55, Justin. We met in 1998, and we were kids, and now we're old. Oh, hey. We're grumpy old men. Senior citizen discounts on the way for you. So start looking at your AARP and be ready. My better half is super excited that at 62, she's not there yet, but when she gets there, because we like going to the national park. So you can get a national park, like lifetime thing for like 60 bucks.

59:41And that's all. She's like, I can't wait to be 62. I'm like, I want to be 21. I don't want to be 62. But, you know, life isn't, you know, listening to me about that. There you go. Or you just need to find yourself a fourth grader because I think in fourth grade, you have access to all the national parks for free. Yeah, that's super cool. So, hey, let's have a grandkid. And it's just that easy. You just have to wait a little while. But I will say, wait, what's your favorite national park? Because I will tell you the best one that I've seen so far. Oh. You know what? Go ahead with yours. Crater Lake.

1:00:18Okay. It is just unbelievable. Now, next year I've got to do Yellowstone. But Crater Lake, by far, just better than Grand Canyon, better than anything, man. I've got to add a number of national parks to my repertoire. We should go together. Yeah, just jump in the Cybertruck and take off. There you go. So, very good. Well, thanks a lot, Mike, for all the insight. And again, you can catch Mike next week for the Swing Trader Status Update. He and I will do that after the close on Tuesday, 5 p.m. Eastern time, and then also on iBD Live on Monday, both of us. So, thanks a lot for watching, and we will see you next time.

1:00:58Have a great weekend, everybody. Bye-bye now.

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