Growth Leads Sharp Market Losses: Tesla, Palantir, Nvidia In Focus

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0:25Good afternoon, everyone, and welcome to Stock Market Today for Thursday, November 13th. It's Alexis Garcia here. And the major indexes retreated today with growth names leading the market to the downside. And here with me to break down all that you need to know about today's trading action is IBD News Editor Ed Carson. So, Ed, a not-so-fun day in the market today, but what do you want to look at? I want to look at Tesla, Palantir, and NVIDIA, all showing losses but slightly different levels. All right, so some names for our naughty list there, but let's check and see how the indexes finish today, Ed.

1:04starting with the S &P, that index down 1.6%. The Dow also down 1.6%. The Nasdaq down 2.3 % and small caps down 2.8%. So let me get my charts going here, Ed, but talk to me about today on the market. Just not a good day for traders out there. We see the S &P 500 reversing lower and closing below this 21-day line. Yeah, there was pretty sharp, broad losses. Tumbling through the 21-day line, not great. Toward the 50-day line, this looks better than some of the indexes. But, you know, I think it's also a lot of people got excited. You know, we had the shutdown ended, but we'd already rallied basically since Friday's lows on hopes that the shutdown would end.

1:56And then we gapped up on Monday when it was basically, OK, we know it's going to end. So there's a bit of sell the rumor, but it's a lot more sell the news, but it's a lot more sell the news than I think a lot of people thought. The Nasdaq worse, it did hold the 50 day line, but went through the 21 day line. And you can imagine we'll look at other things, but you can imagine if you bought stocks, especially growth stocks, as we got near the highs on on last Friday. Well, you're you're you're down. I mean, you're down. Actually, if you bought stocks in the last several weeks, you're probably down if it's in the growth area.

2:26I mean, some are up, but you can just see we're flat to down over the last several weeks. Despite all the ups and downs, this is not a good environment. And how about the Dow, Ed? Because that took a big hit today, this one falling 1.6%, but holding above this 10-day moving average. I mean, it hit record highs earlier. That makes it easier. When you're that high up and, you know, you can afford to have a bad day or two. Banks and drugs have been pretty strong recently for this sector, but they didn't generally didn't rise today. I mean, some did. But, you know, I'd say like when the market's really bad, some of your leading groups will still fall, just not as much.

3:08And so that's that's the environment we had today. And let's just get your thoughts on small caps here. This one falling well below the 50-day line and undercutting that low from Friday. Yeah, two-month low there. Not good at all. Yeah, really, really, really ugly action there. All right. How about market breadth with RRSP? That's the S &P 500 equal-weighted ETF. This one also down today about 1.2 % and undercutting those conjoined 50 - and 21-day lines. Yeah, not good. And you can see over the last few months, anybody like you're not up if you bought since about mid-August. You know, chances are you're basically, you know, in most cases, you're not up on this stock.

3:52And what about QQEW? That's the NASDAQ 100 equal weighted ETF. This one falling 1.4 percent today and again, breaking below the 50 day line. Yeah. So it didn't fall as much as the Q's or the NASDAQ. But I mean, this hadn't risen as much as those. And so, yeah, I mean, there's a lot of damage. It wasn't just that the losses were big and broad. We're seeing, again, a lot of these indexes, you know, undercutting lows, undercutting levels, you know, just not healthy action for the market. And then let's just check in quickly on the 10-year Treasury yield and get your thoughts there. This one taking up today, 1.2%.

4:30It is interesting. You know, normally when you see a sell-off like this, there'd be a rush to safe haven, and so you'd see yields down. But yields rose in part because the shutdown was over. And there was fears that things were going to, I mean, it feels a little safer in that regard. But the other thing is that in the last few days, more Fed officials have come out, you know, and said, I'm not that excited about a December cut. Yeah, we'll get some more data, but the economy will look better. I mean, one reason why they might have cut in December is like, man, we're in a shutdown. I mean, the economy has got to be getting worse as things get cut off.

5:01So the odds are basically 50-50 on December cut. So, you know, that's just a little bit of a shift over the last week or two. And how about some sector ETFs starting with FFTY? That's the IBD50 ETF. This one taking a hit today down 6.6 percent. So what's been going on with growth names in this current market? Yeah, I mean, yes, there's differences. And there are definitely a number of names that were down 8%, 10 % in this index today. Not good. I mean, we bounced in. It was like a big, powerful upside reversal on Friday. I mean, only slightly up, but it was a big reversal from the lows. But then the next day, it didn't even get above the 50-day line.

5:37And you can honestly, yeah, we hit that high at 41.38, fell down sharply, then didn't quite get back to the old highs. And now we came back down, came back up. So now we're seeing lower highs, lower lows, and, you know, and it's pretty violent. So a lot of losers in this area, not just now, but just in the last day, this week and a couple of weeks. What about ARK-K? That's the ARK Innovation ETF. This went down over 5 % today. And again, falling below this round 80 number here, Ed. Yeah. So this tells you that the high beta names, along with FFTY, the high beta names really getting hit hard. Tesla's the biggest holding in ARKK.

6:23But there's plenty of names, like Palantir is a top name. There's a lot of names that had really bad days in both of these funds. All right. Well, we'll take a look at those in a minute. But let's continue here with SMH. That's the VanEck Semiconductor ETF. This went down at 3 % today and falling below the 21-day line. I've been looking a little better in some of the things, and AMD's been doing better, and NVIDIA looks better out of the three names that we looked at, and we'll look at a little bit. But it's not great here. I mean, a couple days ago, this looked pretty strong, you know, but this is sort of the better part of the growth area now, and it's not looking very good either.

7:00How about KBWB? That is the bank ETF. This went down a little over 2 % today, looking for support at the 50-day, or at the 10-day, I'm sorry. Yeah, so we're not really up, but we're basically flat for the week. And this was one of the leading areas. A lot of big banks, some of them held up fine. And they're doing it. And look, I mean, we could just maybe they form a handle. I mean, it's not like this is bad. But I'm just saying is that on a day like this, oh, yeah, growth led, but plenty of big banks had not good days. And so that's just the kind of market, you know, you can have relative strength, but be an absolute loser in a bad market.

7:36This is not a bad market. It was a bad day. But it's just something to keep in mind. And what about XBI? That's the Spider Biotech Fund. This one also down today 1.9%, but still well above that 21 and 50 day. Up solidly for the week. Still looks good. It's just not a good day. You know, it's just the losses were broad. Well, we know sometimes you can't have good days all the time. But have a look at GLD. That's the Spider Gold shares. This one down 0.8 % today, Ed. but you know trying to hold tightly here after this big run over the last few months. Yeah I mean so this one this one's looking pretty good right here it's like there was probably some safe haven flows that helped on this looking pretty good especially after these strong strong bounce in the last several days.

8:29And let's wrap up with a look at IBIT that's the Bitcoin Trust ETF this one falling today 3.5 % and is now well below this 200-day line, Ed. So continuing a downtrend here. So tell me your thoughts on Bitcoin. Yeah, this is not acting well. I mean, it's hit resistance a number of times. Ever since it hit that, it's really lost several times. It's been hitting highs. The relative strength line has been weakening. And now, of course, it's just breaking lower. Bitcoin itself went below 100 ,000. This is at a multi-month low. I mean, this is part the reflection of speculative high beta plays really not acting well after doing quite well for a while.

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9:47This one falling 6.6 % today, breaking below the 50-day line. So what's been going on with this one? And talk to me about this chart. I mean, the chart hadn't looked that great recently because it was pretty volatile, but still it was holding up okay. I mean, it was finding support at 50-day line. It was almost at the 21-day line, you know, but today, pretty decisive break, not just through the 50-day line, but it's a break through all the short-term levels. And you can treat this as a flat base or as a handle to a long consolidation either way. But it's, you know, anybody who bought recently, like you bought at 450, you bought at 470, you're down.

10:24You're down well more than 10%. You should be out. And the decisive break at the 50-day line if nothing else would do it. If you bought, say, a 350 or you bought a 370 in the prior base, one of those kind of areas, well, you've given up over half the gain. It seems like with the decisive break of the 50-80 line, I understand if you want to hold some of it, but it seems to me this is a spot where you'd think like, well, you want to have at least paired the position. You don't want to see a gain that was really strong in just a few weeks turn into essentially nothing. So, I mean, I think people could have taken some profits along the way at different times.

10:59But this one seems pretty clear cut that recent buyers should do it. Now, if you've owned it since 2018 or something, well, you can do whatever you want. But I mean, but for people who bought, a big chunk of the gain has gone. And you want to preserve some of that. Could it bounce back? Sure. But it could also break lower. I mean, you can just look at the history of Tesla. like a lot of growth names is that you have huge runs and huge sell-offs. So could this stock fall to 300 easily? Could this stock fall to 200? Pretty easily, especially if we got into a correction or a bear market. I mean, again, it could go up to, you know, if you have good news on self-driving, you go up to 600 tomorrow.

11:40But it's just something to keep in mind that even if you love this stock, it's been clear that there have been times to hold it and times not. Right now it's looking dicey, you know, for people who bought it even a couple of months ago. Yeah, just looking at the weekly here, it definitely seems like a possible change of character here. Let's jump over to Palantir. It's another one that had a rough day today. This one down 6.5 % and again, well below the 50-day line. Yeah, so people who had bought on the 188.20, if you had held on through last Friday, you know it's not really working i mean it's just now it's clearly at the bottom of the sell signal i mean you could have said oh it bounced back in time okay okay i didn't sell fine um but you know now it's now it's clearly like something like nine percent below the buy point uh and you know if you bought off the if you bought you know on last friday or on monday you're definitely down quite a bit as well that you round trip and you probably would have wanted to exit it's not for longer-term holders, like if those who bought it back in April or longer-term, it's a little different story because it hasn't undercut the recent lows of the last few weeks.

12:53But if it did that decisively, then it would be pretty decisively through the 10-week line as well. And then you might be thinking about, I might want to take some profits here. Again, selling a winner in that situation, a big winner is a different situation than some of the hard and fast short-term sell rules where it's like, you're losing money. You need to get out as opposed to my big, big, big gain is becoming somewhat smaller. That's always a tough thing. But it's something that if we undercut some of these recent lows, like at 169 or so, then you'd want to be thinking about taking some profits on a longer term hold.

13:27All right. How about we dive into NVIDIA, Ed? This one down at 3.6 % today. Looks like it found support at that 50-day line, but another one here that hit a high and then has pulled it back. Yeah, I mean, it held the 184.48 buy point from way back there. It held the 50-day line. So this looks much, much better than Tesla and Palantir. But it also has given up a lot of the game. Like it ran up just a couple of weeks ago. It just ran up, and it's given all that back. Like, then it, you know, but we gave it all back, then jumped up again and given it back. And that's a story with a lot of growth names.

14:06It's just not, it's not, these stocks are acting violent sometimes. And it's sort of like they're acting out in a bad way and they might need a timeout. I mean, honestly, that's sort of how sometimes, but in and of itself, you could still be holding it from that buy point. It's like, okay, you've round tripped and everything, but it's still holding it. But earnings are in a week. So what kind of cushion do recent buyers have? Now, if you bought it at$1.55 or whatever the prior base way back when, yeah, you still have a cushion and you can hold that. You know, you can hold that if you want. You can take profits if you want.

14:38But if you bought it more recently, you're probably flat to down or barely up. So we'll see. You have a decision to make. You know, those folks have the decision to make because this will move. And sometimes, you know, there have been definitely earnings report days where the next day it gaps up and then it reverses lower. I mean, it can move a lot. But this will have a huge impact on the market rally. I think with a lot of AI stocks struggling right now, and not necessarily the businesses, but the stocks, I think that investors should be very wary. And I think just a general thing is that you should be very cautious about investing in tech and AI right now unless it's a long-term hold because of the action and with NVIDIA earnings coming up, it's not a good time to be heavily invested in tech.

15:27Yeah, it just seems like there's a lot of chop out there. And we definitely dive into this on our upcoming earnings cheat sheet video. So that will be live tomorrow morning. But, Ed, thank you so much for your insights today. We really appreciate it. All right, well, that wraps it up for this episode of Stock Market Today. We'll be back with more market analysis tomorrow morning, starting with IBD Live. You can head on over to investors.com slash IBD Live for all the details there. And of course, Justin Nielsen and Ed Carson will be back tomorrow for our special Friday extended version of SMT.

16:06So be sure to check that out as well. Thanks so much for watching and we'll see you tomorrow.

16:38with impact.