Dow Crosses 50,000 As Stocks End Rocky Week; Carnival, GE Vernova, Taiwan Semi In Focus

30:12We could circle back to that at the end. You could get through the stuff and then we'll circle back and talk about IBIT. We're almost there. Yeah, we're almost there. So GDX related to silver and the gold that we were talking about, you know, this was up over 5%. So again, you know, after that big break, we'll see how it handles itself around 100. SMH, also, look, it's not like all tech has been dead. We're going to talk about a chip maker, TSM, in a little bit, but this was up 5.4%. And NLR, with the energy and everything that nuclear is expecting to provide for these data centers and AI, this was up a decent amount, 5.5%.

30:58Jets coming in very strong. You know, we already looked at love, but this is something that is up 5.7%. So really helping their XME, the metals and miners, you know, again, a little bit in recovery mode, a lot of the gold silver plays in here, but also copper and coal and, you know, aluminum and steel, you name the metal, it's, it's, it's represented here. But that was up almost 6 % today. Again, a lot of that bounce for the gold and the silver plays. And then now here we go with I bet the cream of the crop, if you will. for the day up almost 10%, but man, this still just looks like a do not touch to me.

31:41Yeah. So it is a broken chart and you need to, if you're new to charts, you need to understand when a chart is broken and when it's not. And the easiest way to do that is to go back. And you don't have to do this now, Justin, but you'd go back and do a change date to when it was up there where it wasn't broken. You can just go up to the 71, 82. And then you play through that one bar at a time until you get to a point where you see in your eyes through the lens that you look at it, where that chart is broken. For me, that would definitely be broken the day that the high was underneath the red line, the 50 day, the first time.

32:22Yeah. Right there. No, the next day. Yeah. The day. Yeah. That day. That's where I tried to get. but let me erase that. Okay, here we go. So at that point, that's a broken chart to me or a breaking chart. Once it took out that 6158 and the 6132, you're low of that base, then it's a totally broken chart and it needs to repair itself. Charts can repair themselves. They form bases, but at that point, unless you're just doing it for a trade and that's different, You know, I'm not right now I'm talking about position trading, but swing trades and little, you know, little trades. I'm not talking about those, but for real position trades where you're buying and try to hold it for weeks or months or longer, that's broken.

33:09And it's been a no touch since then. Now, let's go to the weekly, because I think I think that this and there's no way to prove it. But my theory or what I'm thinking is that all the devastation that we saw in crypto, and you got to assume that Ethereum and Bitcoin are the cream of the crop, the quality ones. And so it's probably happening in all that space. I don't look at any of the other ones. But if those are falling, I would imagine the rest of the space is falling. And those are broken charts. So what happens? A lot of people have a lot of assets in those. And those are a little bit different because they're not traded off of fundamentals.

33:49It's traded off of different things. And I don't even want to get into that because then it's a whole debate of who believes in it and who doesn't. And I just believe the chart and the chart is broken right now. And if the chart heals itself, I'll trade it. But when it's broken, I don't want it. But you have a lot of people who are just almost religious about their love of crypto and in that whole space, and they want to hold on. So that's fine. It's up to them. It's really made a lot of people billionaires or millionaires and everything along the way. But if those who were early on it, but after that, these roller coaster, let's go to the GBTC.

34:27Cause I think that, that, and you can go to do the best fit on there if you want, just to be able to get the whole chart on there. And I went with a monthly. Okay. Thank you. So this wild ride that you see on a monthly, that's the character of an instrument. So we like IBIT because it's just a little bit cleaner, but this one has more of a history for Bitcoin. And you've got to think we're rolling over now. What's happened in the past is the most likely to happen in the future. So those drawdowns that you had from, what was that, in the$50 range to like about$7 or so that happened, and then the other one, just calculate those percents and just say, okay, that's your base case.

35:16You know, just split the difference between the two of them. Just average those losses. This is how I would look at anything and just go, okay, this is starting to roll over, so that's my target. Doesn't mean it's going to hit it. It could overshoot it. But that's what would be normal and natural because that's what it does. And it's just like if you were looking at a cyclical stock, pull up. I'm just trying to think of any cyclical one off the top of my head. But let's not even go there because I don't want to get derailed. But with this one, I'm getting better, Justin. I'm getting better. Look at you catching yourself.

35:50I've seen my tangents coming a mile away. So with this one, just visually, I look at it and go, it looks like it could come into$14. It doesn't mean it could, but just be careful if you're in this video. It doesn't mean that it will, but it certainly wouldn't be out of character at all. It would be more out of character if it didn't. Now, if it came down, let's say this is as low as it got, and then it firmed up and went up. Wow, that's a big, positive change in character. So you don't have to guess. You can just sit and wait. Let's go to the daily on this. By the way, one of the comments here from Jack is, that looks like one big ascending base, possibly.

36:27Jack, you're funny. That's good. Yeah. So where do you want me to go? Go to the daily. Okay. That was good, Jack. Okay. So if we talk about those basics that we were saying before, your red line, which is your 50 day on a daily or your 10 week on a weekly, that you want that to be above your black line, which is your 200 on a daily or your 40 week on a weekly. So you wait for that. And then you also wait for the instrument to be above your red line, above your 50 before you even look for an entry point. And that'll keep you out. And just go back and think through that. If you go back to the IBIT or the GBTC and study it historically, either of them historically, just what that would have kept you out of so much pain.

37:20Look at that whole way down. or yeah go back to that weekly chart that all that pain that you saw in 2022 if you would have just followed that basic thing um it doesn't mean that you would have like nailed it and had big gains but at least you wouldn't be fighting the downtrend so i know we went a little bit long on that but i think it's really important because some while you were talking before i was trying to run some screens to come up with some good examples but i ran out of time i was just running screens for for stocks that were down 10 % or more for the week. And there's a ton of them.

37:57I mean, a lot of them. And people should go through and look at that to see the devastation. I just don't want people having fallen in love with a stock or an instrument like this and just holding it forever. Or a silver, let's go back to silver. If they were - And I just want to kind of add here, if you can get out and kind of just chop this part, Even if you, you know, because I think you could have argued that there were maybe, you know, places to get in earlier here. But even if you waited until it got back to the level where you sold it, just chopping off this volatility can do wonders for your equity curve and your standard deviation and your risk.

38:37Yeah. And your mental capital. Absolutely. So, yeah, definitely, definitely worth considering the benefits of sometimes not holding something and hoping for the best. You know, because, again, the other possibility is, you know, with, you know, maybe not with Bitcoin, maybe it's, you know, going up forever long term. But there are certainly stocks that we've seen that you would think are safe as safe as anything, you know, 100 year old companies that just vanish and are no more. When you want your spring break to feel like. And your kid's pool day to feel like. And your hotel bed to feel like.

39:20And room service to feel like. Because at Hilton, hospitality feels like. Your cabana's ready. Would you like fresh towels? It matters where you stay. Book now at Hilton.com. Hilton for this day. Where were we going next? We can go on to the individual stocks if you want. Okay, let's do that. And we can start with, again, we talked a lot about how strong the transport area, whether it was jets, but another area that's moving people around is the cruise line. So let's take a look at Carnival. I'm going to go ahead and take the best fit off before I forget and you start yelling and crying. So here's Carnival on the weekly.

40:07You can put the boxes back on too. We'll do that as well. Okay. And yeah, so here's Carnival on the weekly chart coming out of this consolidation. I like how it had this consolidation here about 25 % deep and then a nice tighter consolidation where it gives up less ground, more tight action in there. Give us your thoughts. Yeah. So my pattern rec is not perfect. is about 80 % accurate. So it's saying it's a consolidation, but it's really not. It's really a cup with handle. So it broke out of that. I do have a position in this. We did put it on Swing Trader and I bought it after that. And it's this along with Viking and RCL, which I do have positions in those as well.

40:59Those all look good. And that's one thing that you want to have, you'd prefer the entire group going and then you can pick or you can just do, you can buy all of them or various amounts in each one. But they all look good and they're all going in the right way, in the right direction, at least for now. And that's if you're picking a stock, whether it's a chip stock, a restaurant stock, a bank stock or whatever, try to have the group going. Play through the entire group and make sure you're not the lone wolf in there and the only one going up because it's just hard. It doesn't mean it won't work, but it's just harder.

41:38Is Carnival great? No. I mean, look at that earnings line. It's kind of flat. Scroll down on the quarterly numbers. And look at the sales growth is mediocre. Earnings are positive, but they're all over the place. So is this an A quality stock? No. Just by definition, when you have weak sales like that, it's not. I understand the product and service that they provide. We go on there once or twice a year and it is what it is. It is a really cheap economical cruise or it can be more. It is one of those things where it's not high end and I think that's good for the masses. RCL is a little bit higher end and then of course Viking is above that.

42:23They all have their different ships in different price ranges, but it's nice to see the high-end stuff working the middle and the lower end um working and we see that's in the airlines as well you know pretty much all of them going in the right direction let's go to the daily to see entry points and all

42:45and so is this a perfect entry no but sometimes you just go with the entry that you that you have because of what the market is doing you can either just pass it up which there's nothing wrong with this. Or you look and say, okay, where would I know that I'm wrong? And you would really know that you're wrong at yesterday's low. Now you can get out before that if you just want a lower risk or if you're swing trading it, but that's where you know that you're wrong. And it would make sense on the chart to exit at that point. And the other thing it has going for it is earnings aren't for 42 days. So you've got time on your side there to try to get a decent enough gain to to possibly hold through earnings.

43:28And we'll see, it tried to break out of that cup last time and couldn't do it. And it's given it another chance. You can see it's really like it was a cup over there and then it formed this little mini cup with high handle that's kind of, it's not what we would normally say is big enough, because it's not. I mean, Bill would want at least six weeks long and this one is just one, two, three, or four weeks in here. but still it's that same concept. It just depends on where you started off. So that's that one. We can move on to the next one. Just real quick. So, you know, you mentioned, okay, there's RCL, there's Viking.

44:08I do have a position in Viking. There's Carnival here. If, you know, one way to go about it is you could just buy all three, let the market tell you which one is the leader. But But if you choose one, how do you find the leader? Which one suggests most leadership for you? Or is it just kind of unknown? You have to wait for the market to decide? No, I would say of the cruise lines on the ocean, Carnival is the leader. And of the other ones, the river cruise, the little Viking is the only player, but it is the leader there. So the difference between it, let's look at the difference between RCL and CCL.

44:45And I bought all three. And we put Viking and CCL on the list. And RCL was, we didn't want to put all three of them on the list because it was overkill. But this one, why I'm saying that is not the leader right now is it hasn't broken out, whereas CCL has. Now, it's in position to break out, but it's lagging a little bit. And you did have a really nice reaction on the earnings. I mean, a really powerful gap. And what I like about this one is how well it handled itself afterwards. It never even undercut the low of your gap update. And this is kind of a classic entry. I love these entries, but you asked the question of which one is the leader.

45:35So look at this one versus now, get this in your head and look at where the current price is versus at 366.50, our last marked high at the start of the base, not the last mark, but the marked high at the start of the base. Now look at that position. Now look at CCL. And even though the relative strength number is slightly lower, I think the other one was 84 and this is an 83 so that's how it performed over the last year versus the database but this one was the first one to go into new highs and even though it was the rcl that it was the one that recently came out with the good earnings now let's go over to the other one viking and viking is my favorite uh because i like the way it trades it trades so much tighter than the other ones.

46:28Look at the depth of that base. How deep is that little flat base? Just 9%. 9%. I mean, that's beautiful. Lots of stocks we trade go 9 % up and down in a day. So to have an entire base that's only 9 % deep, that's the quality one. So if Bill were with us, for that reason, he would be going to this one because it's so much more constructive. The other ones are trades. And look at the sales on there. Even though you have some deceleration, you're leasing the teens and you have decent growth on the earnings as well. So from a fundamental standpoint, Viking is the leader. From a quality of how it trades, Viking is a leader.

47:17but between the RCL CCL in the let's look at NCLH. Cause that's another player in there. Since you asked the question, I was trying to be good. I know. I know. I, that was me with my can opener opening the can of worms. Let's go to the daily on this one. And just that same thing that we were talking about before of the position of it. If you just looked at this in isolation, didn't look at the RS number or the RS line. Oh, nice looking couple handle. I've seen better, but I've seen a lot worse and it's in position. You could draw a little downtrend there from the 25, 13 to the, the start of the handle to the to just being tangent.

47:59You, you can draw a line across the tops. No, no, no to like, Oh, yeah, yeah. Gotcha. From 25. Yeah. There's lots of ways to doing it. How he was doing it wasn't wrong. It's just different than what my eyes were seeing. You didn't see what my eyes were seeing, Justin. So this looks like it's set up to go, but it's by definition the laggard, because look how far away it is from the old left side high of the base, as well as that RS line and the RS numbers is much weaker. And then that's even without getting into the fundamentals. Yeah. Okay. Shift in gears. It's been undeniable how strong the chips have been.

48:37And this is SMH. We talked about this up 5.4 % today. This came down to the 50-day moving average line. Nothing really, as much as we've been complaining about the weakness in the NASDAQ composite, SMH, for the most part, was holding up pretty well, especially considering that NVIDIA, which doesn't look nearly as strong as SMH, is the largest component. in it. So SMH was doing well despite NVIDIA kind of acting as a drag on it, although, of course, today it was up 7.9%. But TSM. Pull up AMD as well. AMD, okay. That got hit on earnings hard. It's up 8 % today, but that's a broken chart for now.

49:19And it looked really good before. Broadcom underneath the 50-day moving average line. Yeah. Well, Broadcom is actually looking like it wants to do a shakeout plus three, but it's a laggard. So typically a shakeout plus laggard recently in the short term. So that's a can of worms. We're not going to go on that tangent. You cried. Let's go back to TSM. Let's stay on point, Justin. There we go. It's the third show to do. Thank you for your discipline. This is breaking out of a little, you know, it's a little bit too loose to be what I call a shelf, but it's in the vein of a shelf or kind of like a little mini base on base.

50:01Meaning you had your little double bottom there, it broke out, and it formed this thing that isn't quite long enough, but almost long enough to be a flat base. You could say it's like a Bill O 'Neill square box type of thing. And I do have a position in this that I bought today. What's nice about this is how much better it's held up than all of those other ones that we just looked at. It's just completely disconnected from them. And you've got the earnings behind you. So this looks really, really solid. I think the only regret I have is that we didn't put it on Swing Trader. We had just put so many other things on today.

50:41We wanted to pace ourselves and kind of just stop because it's been so choppy. We put a bunch of stuff on, we get stopped out. We put a bunch of stuff on and get stopped out. So at some point we just kind of just say, okay, that was enough for today. But this was pretty much next to go because it looks solid. And then that marked high, again, that we're talking about, the 351.33, you take that out. That's a solid buy. I think it's viable even right here. Very good. Let's go to the weekly and look at the quarterly numbers. just to get in the habit of everyone should always do this to separate out the quality of what you're doing.

51:20Because we do a lot of trades, but then there's ones that you want to look at and say, what's quality? And this is quality. Look at those sales growth and just get that picture in your mind. This is what quality looks like. Big numbers and steady. It's not 5%, 50%, 3%, 17%. It's pretty much steady, relatively steady. And then the same thing with the earnings. For a chip stock, this is steady. And you also have your estimates next quarter at 51. Whenever you have an estimate that's higher than your current most recent quarter, that's a really good sign for it. So I would say from a fundamental standpoint, this is a B plus A minus easy, if not higher.

52:06So it's got that going for it. Yeah. And look, a lot of folks talking about whether or not the game is over for AI. Matt Caruso was on the podcast this week and he was kind of suggesting it's more like halftime. See what I did there? Super Bowl coming up. So who's playing? I'm serious. Who's playing the Rams? You know what? I was going to say as part of this, I would give a hundred dollar bet that you did not know who was going to be playing in the Super Bowl. The only thing that made me hesitate is that David mentioned it on the show this morning. So I wasn't sure. Yeah, it's going to be Seattle Seahawks versus the New England Patriots.

52:43So a little bit West Coast versus East Coast action. So yeah, that's who are we rooting for? I'm asking my father right now because I know he's watching the show and is so disappointed to me. Well, well, you know, there are those market indicators, right? I can't remember if it's when the AFC wins or the NFC wins. Oh, yeah. So so exactly. So maybe we should be going for that. I'm telling you right now, Seattle is going to win. OK, because you know why. That's where Jimmy's from, man. Come on. OK. OK. Because that has a lot to do with football. So OK. Yeah. So moving on, you know, one of the A.I.

53:26related stocks, of course, is G.E. Vinova. This, you know, a lot of people recognize that power is going to be one of the important things here, whether it's powering up the chips, powering up the air conditioners to cool those chips, the data centers, you know, a lot of people are going to need that power. So here's GE Vinova. We actually recently had this on Swing Trader. And yeah, as it was breaking out here, we did a quick trade in it, got out as things were starting to fall apart earlier this week. But what do you think of it now? Yeah, I did buy my position back. We didn't put it back on for the same reason why we didn't put the TSM on.

54:04We had already put other things. I think this looks really good. And I think it's still viable here from a swing trade standpoint. It's too far out of there for a position trade because it's 7 % past that pivot. But if you're trading it, I would use yesterday's close as a stop, if not a little bit under today's low. is to start scaling out. But what I like about this is what happened while there was so much destruction going on in the rest of the market that this was holding up well. Now, it wasn't holding up well enough for us to hold it on Swing Trader, but stepping back from it, that was normal and natural action.

54:49It came down right to its pivot, got support, and then closed well off of its lows there for both of those red days. What was the closing range on each day? For the red days, we had, let's see, 43 % on the fourth. And again, that's when I think a lot of stocks were getting hit by that anthropic news. And then we were at 53 % the next day. Perfect. So the way Bill would look at supporting weeks would be you're coming down with a, if you're coming down in price and you have a 40 % closing range or higher on a weekly basis, that that's actually support. And I did a lot of work with them, you know, on that years working on that.

55:34And the old hello program. Yes, the old hello program. But then we, we worked on it in, in, in Wanda with my base thing, because that was major limitations. But anyways, with this, those two days were actually support. So you really, you've got just a wall of blue here, like modified blue, because it's been, it was blue for, you know, however many days can't count that quick, but maybe eight days or so. And then we had today was blue. And if you classify the last two, it's just this big wall of blue in the midst of all of this volatility. This didn't have that much and the earnings are behind you and it's a base on base.

56:19So it's got all that going for it. Now let's look at the weekly chart and let's go down to the quarterly numbers. And this is where there's a bit of a problem, right? You've got your sales numbers are, are pathetic. I just call the way I see it. It's like, it's pathetic. It's a plus four. I'm in the stock. I like the stock. I like the action, but you've got to be intellectually honest. those are pathetic better than being negative they're they're pathetic and the earnings are all over the place uh you've got a minus 61 and then a 569 and so on so it's not stable but that's why it's been as volatile um as it has been it doesn't you know it's not a tight trader not as tight as like a you know a viking or something like that let's go up to the annual numbers though, because there's something on there that, that my eyes really go to is those big, massive estimates that we've got 93 % and 55%.

57:22And so that makes up for a lot of problems when you've got the, you know, so you always want to think, okay, are you playing a stock that is trading off of sales? Is it trading off of, uh, you know, stability of earnings or is it trading off of the future? And sometimes you got some that are trading off of all of those. Those are your best ones, but this one is trading off for the future clearly because look at those massive estimates. $21.56 is what the analysts are saying that they think. Well, that means they really think it's a lot higher. Analysts always low of all. So that's why the stock has been doing what it's been doing, but it hasn't been easy to sit and hold that one.

58:03But I think it's back in position and is it viable with the stretch right now? Very good. And I, one of the reasons why we chose this, this was a stock that I chose for the swing trader column. Unfortunately, I didn't do the swing trader column last week because I was in Florence dropping my daughter off to school. She's doing a semester abroad there. And yeah, I talked to her last night. Is she in Florence? No, she's in Sicily right now. So that's just the life my daughter leads. I'm super jealous. um so while you've got it while you've got this up and while i'm thinking about how i'm going to try to be like you and i'm going to go to olive garden this weekend yeah let's try to be like my daughter stella so yeah let's go to iren because someone in the comments a few people are asking about that and i just want to just kind of talk about this for a second go to the daily This is a stock that you want to stay away from a stock in this position.

59:06Yes, had a really nice upside reversal. Yes, you have the earnings behind you. Yes, if you did buy it today, using today's low as your stop, I could see how that could make sense from a strategy. But it's underneath the 50-day in a broken cup with handle. So again, if we go back to that concept that we were talking about earlier, if you go bar by bar through something, if you went like a week or two weeks ago when it was breaking out of that cup with handle, yes, it was wide and loose and deep and all, but it was breaking out, looked normal, but then it was broken. And really three days ago when that was when that chart truly broke, when it broke the 50 day.

59:50So it needs to do something else before it's viable, at least through our lens. Now, again, if someone bought this today and they're using that and they're going to be, you know, truly going to use today's low as a stop, that's different. But this is not something how we would like to buy something. And plus, it has such a huge ATR on there that this one, I have traded that one in the past. And it is a wild one. And, you know, like it moves all over the place. So just be careful with ones like this and, you know, try to look at that ATR that we put in, in market surge, that will tell you how volatile a stock is, how much average true range, how much does it normally trade and try to get with something that is more, that you're more comfortable with, you know, and just start paying attention and I go, okay, I do well until the ATR is above six.

1:00:42and then I can't handle it, or five, or maybe some people can handle it above 10. It's very, very tricky. Yeah. A man's got to know his limits, as Clint Eastwood would say. Okay. I'm going to go ahead and stop my share and turn things over to you, Webby. Take it away. All right. Do you feel lucky, punk? I love Clint. All right. Let's go to the Spy Weekly. This is the Bob Weir, take a step back portion where we look at the weekly candles and we are going to go through, if this is your first time, we're going to go through a series of charts. We're going to look at each one in isolation, but in our mind, we're trying to paint a picture of what are the different ones looking like?

1:01:26Are they positive, negative? What expectations can they give us for next week that would be normal and natural? Not predicting, but just what would be normal and natural and just putting that mosaic together. So we're looking at this in isolation. So this is a weekly chart of SPI using candles. And that is a good candle. Is it a great candle? No. Is it a really good candle? Yes. And why is that a really good candle? Because you have this really long wick here. I'll try to blow this up even more so people can see. This wick, that's where it traded down to. So taking out all of those stops along the way, anyone who had mental stops or hard stops in there.

1:02:07So it cleans those people out, kind of shakes the tree and then closed higher than where it opened. And that's why you see it in blue. And that's what the candles will do for you is rather than being blue or red because of the movement, it's versus the open. And for a weekly candle to look like that, meaning having a really long bottom wick with a blue body, that's very good. But what's not good about it? You do have a decent top wick. So it's positioned too far off the top to be great. And also that the candle or the body itself, what isn't that wide and you would like it to be, and it's smaller than last week and it's closed underneath last week.

1:02:56So that would have made it look better. So just envision a close here would be, your body would be bigger than last week and kind of an outside body week, so to speak, as well as a smaller top range. But we didn't get that. So just so you know what to look for. Now let's look at the NAS. I can see what that one does for us. So this is a bad candle. It's just, there's no two ways about it. It's not a horrible candle, but it's a bad candle because you have this really wide negative body, meaning you opened here, you closed here on the week. That's bad. What's good about it? You undercut all of this area.

1:03:37You had your shakeout with your large bottom wick. So that's good. And your top wick is smaller than your bottom one, but it's sloppy and choppy. And it tells you that probably next week, just this in isolation, not what we've seen already, but just looking at this in isolation, you would think you'd be going in a downtrend from here because you don't have any reason to think otherwise. Whereas SPY was different. Now let's look at IWM. And this is quite different than those. We have a giant positive body. And again, I have a position in IWM, a giant positive body here with a longer bottom wick and a tiny little top wick.

1:04:22The only thing that would have made this look better would have been taking out last week's high but you can't get everything that you want but that is a positive one and let's also look at rsp um here that's a beautiful one wouldn't you agree well what do you not like about this one justin um let me go over there because i was uh actually dude i was just messing with you there's nothing i was just i was just trying to do a joke okay we will go Sorry to put you on the spot there. I know you're multitasking. We never do one job at a time at IBD. If we're only doing two jobs, you know, that's a win.

1:05:02All right. So this is a really important segment today. This is our regression segment. And we've now had 50 days. So that becomes really relevant. and yesterday was, let me just kind of step back if this is your first time looking at regression lines. What we do is we lock in 50 days worth of trading. We're starting off here on the 21st and we're ending it here on the 4th of February. And that is 50 trading days. And then we're just looking at your one standard deviation and your below and above. those are your your guardrails on the outside and your the white line in between that's your important line that is your line of best fit your regression line uh i call it home base that's where if the trend is intact that's where the stocker index wants to live it wants to that's its happy place it wants to get up there so when we were breaking out down below it yesterday in a big way with our high underneath that one minus one standard deviation I'd sent to the team.

1:06:12I'm like, okay, well, we've got one or two more days of this. And then this one is, is broken. And the hope was exactly what we saw today is to come when you're in this position to get back through your one standard deviation. And really your key point is at this minus 0.75 standard deviations away and that is the green dash line and that's kind of your signal to start kind of pushing it in with the thought process that it's going to do what it did over here when it came underneath it went straight back up and it wants to get up past that white line typically overshoots and gets up to the red dash line or the solid red line and that's what we saw over here so this is now back where this channel is a regression line is back in play and it's actually giving you something very positive um but you want to stay above this minus one standard deviation so a lot of these cases that we've had where it's oh it's it's through that dashed green line time to push it it's kind of like five days and then the moves over so yeah how do you how do you handle that that's where as it's coming through there, you want to gun it as heavy as you can, as you feel comfortable.

1:07:30Now, everyone has to have a comfort level. Now, what you could do is just, if you don't have a comfort level of trading quickly and aggressively, you could just look at this to decide what stocks to hold to understand where the market is. So let's say you're a position trader and you're saying, well, I don't need this stuff. Well, you could use it to say, where are we? Are we in a normal and natural place? Are we in a place where it should kind of slingshot up and go up? And if so, then you might just be holding on to stocks that were questionable that you might want to sell. Or if you're an aggressive trader like I am, as it's going through there, that's where you're than gunning it, but then having your stops relatively tight because if it were to come all the way down here and doodle around, you need to be exiting out because then that was a failed attempt.

1:08:26So it really just depends on your style. But for mine, as it's going through there, I'm gunning it heavy with expectation that I'm going to be able to take some chips off as it's getting up in here. Does that make sense? Yeah, absolutely. Okay. So let's see the composite, which is quite a bit different. Now, this is broken. That trend is broken. Even if we were to gap up on Monday and get back in there, this is not trying to data fit something. This is trying to say, do you see a trend? And this is just chop city. It is, you know, now that our high has been underneath there, I don't have a set amount.

1:09:07It's more, I know when I see it, but it's a few days being with your high underneath the one standard deviation and it's broken. Let's just go to an old one over here. Like this was the S &P's old line that was really holding in. And then over here back on October 10th, that's when it broke so far away from that line. that unless it snapped back the next day, that thing was broken and it was broken and then you just had a completely different trend. Now let's switch over to the IWM and look, this did exactly what you'd want it to do. It came down a little bit more than you'd like, but it got support at its 50 days.

1:09:50So you had to touch there. And I do have a position in this. We have to say it every time. That's what our lawyers tell us. And then as you go through this 0.75, that's where you gun it with the expectation is that it wants to get at least up to home base, if not a little bit past it. And you can see where it stopped right there on the 22nd and then came back and mean reverted. I think I put RSP on here this time. Yeah, this one looks even better. And look how nice this is. It's trending in and you would prefer a better trending market is when you're just staying kind of within the guardrails of your plus 0.7 or plus five and your minus 0.75.

1:10:34All those, those look. Yeah, those look. They look off. I just put this in at the very, yeah, I need to change some numbers around. But anyways, it's doing, it's doing what it should do. And for the next one, I need to, that one. Yeah. You know, that's what happens. when you try to push it too close to the deadline. Okay, now we're going to go over to our 50 % retracement charts. And this is just how I like to look at things being in the Northern Hemisphere of the 50 % retracement. So above the gold line or yellow line here. And this is an art. So you've got to decide where you're going to put your highs and lows.

1:11:16You can do it on an intraday chart. You can do it on a monthly chart and everything in between. So this, I'm taking the highs from October and the lows from November, even though we've passed those, even today, that's the general base that we've been in. And as long as we're trading in this upper half through this lens, it's positive. Let's take a look at that same thing on the NASDAQ. And this one is in a weak area because using the same highs and lows, essentially, this has spent time underneath here. Yes, it got back up there, but it's not about that line, you know, in this case, 22 ,959, there's nothing magical about it.

1:11:54It's where is it living? Some lines are very important, like, you know, channel lines and stuff can become very important. Oh, great. I just lost my internet connection to this. Let's see if the next one will, you got some sort of error. Let's see if IWM will, oh, it worked. It was just some other error. Okay, so now we've got the IWM with different dates. So here I've got the 2nd of January as your low and your high on the 22nd. This one came down, was living most of the time up there, and just had that one day yesterday. Now we're back in the space. So that is a positive. We'll go to the next thing.

1:12:38This is our levels, and this is something that you don't just don't mirror what I have just do whatever works for you. And, you know, lots of times I'll have a lot more lines on there, but it can get confusing to look at for folks. So this is your low from January 20th, and it came down and tested it yesterday and was able to bounce a little bit off of there, but bounce in a big way today. and then your lows from November, those become very important. Let's take a look at the NASDAQ. This one traded through two levels, right, through this level here as well as this level, and these are just lows, you know, the low from January 20th and the low from December 17th.

1:13:22Traded through and went back up, but again, we're seeing this theme of how almost every NASDAQ chart looks weak versus SPY looking okay and IWM looking stronger. And this one came down, hit this, we put a line here at yesterday's low because that's right at the 50 days. So that becomes important when you have multiple lines in the same place, that's important. And we have this really nice move up that we had today. So now your low is above both of your last lines. so that is constructive can you still hear me because i'm having some computer i can hear you okay cool all right so the next one this is uh my fibonacci moving averages that um recently started sharing here and this is just how i like to look and see are you in a trend or not and so it's just a bunch of moving different time frames are all exponential and they're all the Fibonacci numbers.

1:14:22So from the shortest one is a three day, then a five day, an eight day, a 13 day, and so on. The blue line is your 21 day and your tan line is your 34 day. I'll start talking more about that. 34 day is actually very, very helpful, but I've talked mostly about the 21 day. So that's why those two are a little bit thicker on here. But what you want is them to all be going in the same direction. You don't want your short-term ones underneath your longer-term or medium-term ones. And that's what you have here. So that's a problem. So that's negative. And on NASDAQ, it looks terrible, right? Because your three is underneath your three, your five, your eight, your 13 are underneath your 21.

1:15:08And your 21 is underneath your 34. That's going in wrong direction yeah starting to trend but the wrong way now you've got your iwm that was trending up nicely here and then you could see over the last couple weeks they've been your your short ones have been coming down crossing other ones which was not what you'd like to see but now we got that reaction back up and now they're going starting to go in the right direction but let's look at that eqal that you found for us um and look at this is what you want to see so this is your average of your thousand largest stocks, essentially. And look, your three is above your five, five is above your eight, and so on.

1:15:50That's what a nice trend looks like. And that's why I'm bullish on the overall market. I'm concerned about the NASDAQ. Okay. So Mike has gone through a lot of the different charts. And again, it's still this mixed market where the NASDAQ, bottom line, the NASDAQ has been really kind of the one that has deviated in a big way in terms of its weakness, whereas we are definitely seeing a lot of strength elsewhere, and especially lately in the IWM and your equal weighted indexes. So, Mike, you're back. Go ahead and take it away with the Bob Marley. Okay. Yeah, we'll actually go to the... Oh, the Webby RSI.

1:16:31There you go. We'll go to the Webby RSI first. Sorry, I don't know what happened there. So, So this is SPY looking at your Webby RSI, and that is just measuring your low versus your 21-day. And if there is space there, then it'll show up with a blue histogram. And if there's not, it won't. If your high is underneath it, you will see this little orange thing that we saw there, the orange histogram. And that's what happened yesterday. You don't want to see orange. You want to see a wall of blue. So we don't have it there. Nothing else to say there. Same thing with NASDAQ. Well, actually worse because we're starting, we've got three bars there with your high underneath it.

1:17:14That can get really ugly and look what happened over here. That's back in March and that's how they start. So you've got to call it the way you see it. IWM, different. We don't have one back, but we have one for a little bit. But let's take a look at the EQAL. Oops, I guess it doesn't have it in there. Let's see if RSP. So RSP is, you've got a little one there. So we pretty much had a wall of blue here. It went away for a few days and now it's starting back up. So that's a good thing. Now let's go over the Bob Marley, which is, this is how we measure or how far off the highs we are and is it doing anything abnormal?

1:17:55So this one, and this is why we like to look at this this is measuring it in terms of your atrs and both uh i'll just blow this up a little bit this is on spy just so you can see that this one came down pretty much exactly where the last one did just a little bit of an overshoot but that's that's saying that that's in character with that pullback just like these pullbacks over here were pretty much in in line with each other so that's telling you the trend is still intact from that lens let's take a look the nasdaq not so much here right because this was our low that we hit and they hit it again so then that was kind of your base case just like over here it was it was you know in this area was stopping both times and these times shy of that this one we went beyond it so again it's in your caution area or your yellow area telling you that you're more than four atrs off of your high on and And then let's take a look at the RSP on the other side of things.

1:18:55This was just normal and natural. It just came down to, you know, a little bit shy of two and a half ATRs off the high and all was good there. So I'll stop that before I get another crash. Sorry about that, guys. Well, hey, there was a lot to digest here. And again, bottom line, yes, it's a mixed market. And again, that is challenging, especially because, again, like I'll just I'll just air my dirty laundry here. I sold IWM, you know, my positions in IWM yesterday, you know, and then here we are bouncing and I'm having to buy stuff back. And, you know, that's just kind of been what we've been dealing with for for the last few months, it feels like.

1:19:42And that just ends up being a lot of chop and a lot of larger drawdowns. But I do look at this time period as temporary. You know, it's one of those things where you keep on trying because the moment you throw in the towel, that's usually where things really turn around and start moving. And if you're not ready for it, they move up without you. So that's not something I want to see. So I'm not forcing my trades, but I am, you know, still trying to stay engaged. Any final thoughts from you, Mike? Yeah, along those lines, I mean, I got chopped up, had to reduce dramatically and then had to buy a bunch of stuff back.

1:20:18And that's why I was saying at the beginning, be flexible with your mindset and go back and study history. Because as the market turns, typically there's like one last shakeout that gets you and wears you out. And I've been thinking more and more about this market. and it feels so much like 1999, where 1999 was, and I'm talking the first half of 1999, not the last half going into the bubble thing, but you had all these opportunities of great stocks that had great moves, and you had these wild stocks that had wild moves, but if you paid attention to the market averages the way we do through the lens that we do, you're getting chopped.

1:21:01It's just a reality. Luckily, I didn't know how to use the market part well back then. And I was just focused on individual stocks. And that's all I did. I didn't look at, I didn't understand it, you know, because it was before I started working with Bill. I was at Bill's shop in his research department, but I wasn't working with him. And I didn't truly understand how important the market was. And it saved me in that part of 99 because every day I would just look at what the charts were doing. Individual stocks and just basing my buys and sells off of that and not what the market was doing. Now, you and I, along with Chuck, when we went and did market school rules for 1999, the only way we could get it to work was to data fit.

1:21:46And we were morally opposed to data fitting. So that part of 1999, our market school rules had us chopped up. And those are the same type of rules that we're using now. And that's one of the worst historically. The worst, like 1999, where, you know, where a lot of us had our best performance. As strong as that year was for market school, it was just horrible. Yeah. So there's either there's what do you take from that? There's either another way that you look at the market averages during that chop period, or you focus more on what the stocks are doing. But overall, what you do is you stay mentally flexible.

1:22:22And we've both talked a lot about that and how we learned that from Bill over the years of just being very flexible. Go back to the bottom of 1998's bear market, study that change, and just think like if you'd been worn out, chopped up, or even the end of 99, if you just say, oh man, I've been getting chopped up since like right now, like been getting chopped up in various ways since October, just going, oh, I'm just going to take a break and not trade. well then you're going to miss that move now we don't know if this one is going to work out but it looks like it and what's great about this past week is we have this major shift where so many other stocks are working so it's now it's not just the ai theme so this is a homework for everyone i would run screens this weekend for things that have gone up um you know just whatever you can make them as tight or as loose as you want.

1:23:15I would say anything up more than 4 % for the week with a closing range, you know, above 50 % for the week, a weekly bar and look at those, everything. Now, if you don't have time for all of that, you can, you can tighten that up and just say, you're only going to look at things above the 50, above the 200 day, above 10 bucks, above$75 million volume. If I'm going fast, you can always rewind it later. And, you know, So above the 50, above the 200 day, above 10 bucks, above$75 million volume with an ATR of less than eight. And that had a move, you know, of five, 6 % for the week with a closing range of 75 % or higher.

1:23:58That'll give you a much smaller list, but that's where the money was flowing this week. And that's where you should look and just be agnostic about what the RS lines are, what the rs number is and just create a watch list around there and wait for them to be in the proper position to buy but there's a lot of new merchandise um out there that is in relative position they're quickly got extended but those are the ones you want to uh watch for a new entry and just be careful out there so in um i i know i'm i'm going out on a limb here and risking opening up a can of worms, but one final question.

1:24:38Sammy Hagar. So, you know, the NASDAQ, the power trend ended yesterday after being on since May. It was under pressure for a lot, but, you know, it finally ended yesterday. That kind of made it so for market school rules, our buy switch is off and we need a follow through day. But that's the NASDAQ. So do you think we need a follow through day in order to be buying? No. You know, because of all these other indexes that have been doing so well? Yes, we don't. And it's funny, earlier, you and I were chatting back and forth, and it was like, I really want us to do and always wanted us to do, we just never had the bandwidth of time to do a blended approach of looking at, we always wanted to also at least look at the S &P 500, but if not more broad based indexes and to have the market school rules on each one of those, because that's how Bill would do it.

1:25:29Bill would, he was agnostic for the most part. He would even, back in the day, he would even use the Dow as signals. Then he got away from that. But do you remember when he used... But what was it in 2007? Yeah, I think 2007, 2008, he was like, hey, weren't you guys paying attention to the Dow? When was the last time he mentioned the Dow? Yeah, that was 2008, the Shanghai surprise in February, 2008. When was it that he was doing the S &P mid cap? Was that like, oh, man, it was way back. Well, and even, you know, even at one point, I think he was saying, oh, let's use the IBD 50 or something like that.

1:26:10Oh, yeah. The New York composite. Yeah, it's yeah. Yeah. If anyone wants to trade the IBD50, whatever, trade it. Look at those stocks, but do not use it for any way of looking at the market for what the market conditions. That's a big can of worms, but don't use it for those reasons. But I would say to answer your question, looking at the broader thing like the EQAL, the RSP, certainly SPY, any of the other ones, but that is going to make it trickier, right? Because lots of times historically the NASDAQ has been the leading index in trades mostly the way our stocks trade. But right now it just looks different.

1:27:02It looks like this is going kind of reminiscent. I said this the other day to the group feels reminiscent of 2000. Not that the bubble is bursting and that we're going to fall all this way down or NASDAQ is going to fall. Not bad at all. But if you go back and you study 2000, the NASDAQ topped in March, but then the rest of the stuff didn't top for, you know, several months later, I think it was like August or something like that. Sun Micro, Corning. GDSU, yeah, the whole host of leaders. Yeah, so just stay flexible. And to answer your question, no, we don't need one at all. With everything else hitting fresh highs, it doesn't mean just be reckless, be careful, but you should always be careful and always have an exit strategy.

1:27:53Yeah. So I should also mention that this is probably our record for SMT. So thank you, everyone for sticking around. Hope everyone has a great Super Bowl weekend for whatever teams those are that are playing, according to Webby. Wait, wait, are we going to have a bet here? I'm betting 51.5 cents on Seattle. Are you going to take that other team? Yeah, sure. Was it the Angels or something? Yeah, something like that. Lakers. Lakers, yeah. So, well, we'll see how things, if the AFC or NFC wins, we'll see what that does to the market, right? So thank you so much, everyone. Thank you, Webby, for all your thoughts.

1:28:33And we will see you all next week. Take care, everybody.

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