How Long Can We Stay Above 21-Day? Constellation Energy, Pan American Silver, Planet Fitness In Focus

0:00Alissa Coram:This podcast is brought to you by Federated Hermes. We put our investments through a ruthless vetting process because the market can be unpredictable and we don't think your investments should be. Learn more at federatedhermes.com slash US. Investments are subject to risk and may lose value.

0:26Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Friday, July 11th. It's Alyssa Coram here. And a week where we saw the major indexes pausing near highs, and this comes amid more tariff headlines and just ahead of a new earnings season. Joining me now to discuss this week's market action and we'll prepare for the week ahead is my colleague, Justin Nielsen. Justin, what do you have for us today?

0:53Alissa Coram:Yeah, we'll talk about a lot of stuff in terms of market action. And then, of course, a few stocks that were looking kind of interesting. That'll include Constellation Energy. Also, we'll look at silver, so Pan American silver. And then finally, Planet Fitness.

1:08Justin Nielsen:And as you mentioned, we'll be taking a deeper dive towards the end of the show, talking about this market in relation to historical precedence, because it is Friday. So we love rolling up our sleeves and digging a little deeper into the action.

1:28Alissa Coram:And of course, the sector ETFs, as we do every Friday.

1:32Justin Nielsen:Yes, we'll take a look at those too. But first, let's take a closer look at our major indexes and the action on the day and for the week. So first, with the NASDAQ finishing down two-tenths of a percent Friday. Meanwhile, the S &P 500 down three-tenths of a percent on Friday. Also, off of the intraday lows, the Dow down six-tenths of a percent on the day. And the Russell 2000 was the hardest hit today, down about 1.3%. but it's still holding above 2 ,200 and that 200-day line. But overall, Justin, when you're looking at the NASDAQ and the S &P, we barely budged for the week, closed off lows, and we're sitting pretty near highs.

2:21Alissa Coram:Yeah, you really couldn't ask for much more. When we crossed that new high territory, and especially for the NASDAQ composite, the 20 ,000 level, the test really is, can you stay up there? and so far so good. So yeah, if you have, you know, these last two weeks were pretty strong and the fact that you're just kind of holding right there, digesting the gains, that's a pretty good showing for the indexes. Now, look, a lot of times there can be some back and forth at prior resistance, just because you get up there doesn't mean you stay up there, but that's what we're gonna be watching for the next couple of weeks.

2:55Justin Nielsen:Yeah, and I would say, especially given how the week started, right? We were down almost 1 % on the NASDAQ on Monday. So we battled back, closed just near highs. And now we're giving the moving averages a little bit of space to catch up to the action because on that 4th of July week, the NASDAQ closed 8.5 % above the 50-day. We're still up there, but there's a big difference between 6.5 % above the 50-day and 8.5%. What do you say, Justin? Yeah.

3:30Alissa Coram:And one of the things when we do those studies of that extension above the 50 day moving average line, something that you have to keep in mind is that just because it's extended doesn't mean it can't get extended. So you have to just be aware of that, that it can go much further than you think. That's where it tends to start dropping off and correcting. But sometimes you get nine, 10, 11, even more extended above that 50 day moving average line and you just continue going. So it's a guideline. What I tend to do is I look for reversals and that might let me know, okay, this could be something that's getting into trouble.

4:08Alissa Coram:But then I also have to put it in the context of where we're at in the market. We are still really kind of early in this rally. And especially when you come up from a V-shaped recovery, that can often lead to a more extended market early on. And so you have to put it in that context as well. Right.

4:28Justin Nielsen:And what I love about what we do is we have a top-down approach. We'll also take a look at underneath the surface, so bottom up and backwards and forwards. We look back in time. We look at it from every direction. Every angle, every direction. So we'll give more context as the show progresses. Let's take a look at the S &P 500 here briefly. Same story, Justin. A little bit of a rough start to the week, but even then closed off lows and we are right near highs.

4:57Alissa Coram:Yes, and to your point, again, you look at the weekly chart here and it's kind of like nothing to see, just tight action, holding the gains. you've got above that 6 ,000 level. That was a pretty important level for the S &P 500. You've stayed above there. You're above the 6147.43 high and you're staying above there. So look, the indexes are showing a lot of strength. Now we should mention that doesn't always translate to your portfolio. Sometimes depending on your stock picks and how concentrated you are in certain areas, your results may vary. from the indexes, unless you are very heavy in the indexes.

5:39Alissa Coram:And we see that with the IBD 50 by Innovator. This is looking at some pretty wobbly action here. Now, overall, look, we've had a very strong recovery compared to the NASDAQ. This has been performing very well year to date and off of those lows, but it hasn't been nearly as steady. There's been a lot more back and forth. And sometimes you're seeing great action in the NASDAQ composite and the S &P 500 like this week. And we were seeing some pretty terrible action in FFTY. And a lot of us were feeling that in our portfolios since we do tend to lean in growth.

6:15Justin Nielsen:Right. So taking a look at a weekly chart here for FFTY, down 3.6 % on the week, while the Nasdaq composite down fractionally, just ever so slightly there. So I think when you put that into context of where we've come from, That's a really great point, Justin. We've seen outperformance since those April lows. And before this week, only one down week. So growth investors have been overall treated well in this market rally. But the waters have gotten a little choppy lately, it seems.

6:51Alissa Coram:And you can just look at some of the individual sectors. I mean, of course, this week, what we saw was a big hit to the cybersecurity software firm. So if you look at CIBR or BUG or HACC, any of those, you can see how yesterday was a really hard hit there. And what was so interesting was that was putting a lot of pressure, the technology stocks, software in particular, putting a lot of pressure on the NASDAQ composite, whereas the S &P 500 to a lesser degree, but RSP was up yesterday. I mean, it looked like a breakout. And so then And today it was a little disappointing that it didn't follow through.

7:31Alissa Coram:But yesterday it was very interesting as we were talking on IBD Live, we were noting that the advancers versus decliners were up, you know, in favor of the advancers for both the NASDAQ and the NYSE exchanges. So sometimes you can get these big hits in your portfolio if you're concentrated in where the leadership has been. And this is where sometimes as you develop the rally, sometimes you do have to be aware that sector rotation might happen. What started the rally might not necessarily finish the rally. And so you have to be prepared for that. But one day doesn't a trend make. So we have to be careful not to necessarily throw the baby out with the bathwater on some of these leaders.

8:17Alissa Coram:And this is where a lot of our sell rules come in. You mentioned on IBD Live this morning how Webby's quick in the dead, quick quicksand and dead rule are useful for some stocks like Netflix. I do have a position in this still, but an early sell signal tells you, hey, when this is getting below the moving average lines on the relative strength line, that can be a warning sign. Not necessarily to sell everything, but to start trimming back.

8:47Justin Nielsen:Exactly. Making incremental decisions. And I own Netflix as well. Wanted to bring this one up briefly as sort of an honorable mention stock this week because we have earnings next week. We have all the big banks, but then you're also going to get stocks like Netflix reporting, which last quarter, that was right around the beginning of this market rally in late April. So we could get some clues as to the market's health once we get more of these earnings reports rolling in. this.

9:15Alissa Coram:Yeah, it was it was tough because April 22nd was when we had the follow through day. And of course, that was right as earnings season was kicking into high gear. So now that we've had a rally and look, you know, arguably, we could we could still pause a little bit here, but we are going to have that earnings season. Sometimes the banks set the tone, but you do get a sense of how the earnings season is playing out, because is it going to be one of those again, where it's gold mines and landmines, things really moving a lot. Sometimes they can be more forgiving of the earnings reports. Oh, okay.

9:53Alissa Coram:Your, your guidance was off a little bit, but that's okay. I'm, I'm sure you're still fine. And other times the CFO coughs funny and the stock goes down 20%. So we'll really kind of get a sense as the next couple of weeks. I think if I, if I'm not mistaken, I think there's about 160 members of the S and P 500 that will be reporting, you know, over the next two to three weeks. So we're going to get a lot very early on here.

10:19Justin Nielsen:This is what we live for. This is part of the fun and games. All right. So we talked a little bit about sectors. Let's officially go through our sector spider ETFs. Justin, please feel free to chime in. I'm just going to sort of quickly run through these. Speaking of the bank's earnings coming up, So we'll have to see XLF. We did talk about a recent actionable area here. Relative strength waned a little bit this week, but still holding close to those highs. Then we move on to our health care sector, trying to find a bottom still, trying to move sideways within this sector. there are a couple of interesting names.

11:03Justin Nielsen:So you can't just look at this, these high level sectors and totally disregard them. But it is really interesting to see some of those sector trends taking shape. And we know that this is a sector by and large that has lagged for a while.

11:19Alissa Coram:Yeah, probably also while we're talking about healthcare, it might be worth taking a look at like IBB, which we have seen a lot of biotechs come on strong. So yes, this has been an area that's been lagging, but the biotechs have recently shown some relative strength.

11:35Justin Nielsen:They sure have. Great note there. Materials, I believe this was one of the few sectors up on the week, XLB showing some relative strength since powering above that 200-day line. Then we also have XLC. This is communication services, a pullback underway here. You have your, I believe it's your meta and your Google in this ETF.

12:00Alissa Coram:Worth noting that Google is not looking too bad in terms of a setup. It hasn't participated as much lately, but it's just skirting along that 200 day moving average line and looks right for a potential breakout. If there's some sector rotation to some of the fallen angels, this could be one to watch.

12:18Justin Nielsen:Yes. Great note there. Here's XLK. The tech sector looks a lot like the NASDAQ composite in this steady Eddie uptrend here, Justin.

12:28Alissa Coram:Thank you, NVIDIA. And I do have a position in NVIDIA. But of course, NVIDIA being crossing the 4 trillion mark this week, that one is helping XLK quite a bit because it's a very big component there. If you take a look at RSPT, which is the equal weighted technology, you can still see that it's not just NVIDIA. This is a technology-led rally. This has been showing a lot of strength.

12:54Justin Nielsen:It sure is. Okay. Next on our list, let's take a look at the consumer staples here briefly. Continuing to underperform, but honestly, we don't have a problem with that in a bull market. We're okay with that. Here's a look at XLI, industrials. You have your GE, your Boeing, even your Uber in here. I do own some Uber. And I think the aerospace defense area this week, Justin, especially today, we saw some standouts.

13:23Alissa Coram:Yeah, ITA is a good way to kind of take a look at the aerospace defense area. But they're not all created equal, you know, as you noted. certainly today with some of the news from the Secretary of Defense, Hegseth, you know, that was really affecting, you know, your air environment, your KTOS. So there were a lot of those that were doing very well because of the drone exposure.

13:50Justin Nielsen:Okay. Utilities. Let's see here. Let's go to the weekly action here. A lot of tight action. And we saw a weekly gain of about three quarters of a percent. We have a lot of those AI utility plays and one of which we'll take a look at soon in the AI energy space coming up here shortly. Here's a look at XLRE. We're continuing to see a downtrend in that relative strength since the April bottom. XLY, consumer discretionary, roughly keeping pace with the S &P. You have your Amazon and your Tesla in here. And then we have the energy sector still trying to get above that 40 week line. And I would say somewhat volatile action in the energy sector as of late.

14:41Alissa Coram:Yeah, it's been tough when you have, you know, all the stuff that was going on in the Middle East. And I mean, while some of it's resolved, you could easily see, you know, flare ups happening there. And, you know, oil can can definitely uh pay the price uh as it were for for that um and look xle has been you know not really a great place to be looking it's uh not only the volatility but really below that 200-day moving average line and a poor relative strength but you do have these areas of strength um fti was one that i particularly noticed uh today uh that you know this this just looks so different from everything else so this is the oil and gas machinery equipment um you know above all its moving average lines, the 21 above the 50, the 50 above the 200.

15:26Alissa Coram:So when you're looking at some of these groups, sometimes it's worth saying, you know, seeing, hey, is there something that's actually acting very different?

15:34Justin Nielsen:Right. Okay. And then two other ETFs that we want to touch on before we move on. First, let's go to Ibit Bitcoin, a big breakout this week. Full disclosure, I do own this as of that follow through day on April 22nd. And the weekly gain here, Justin, almost 8.1%. And shout out to our friend of the show, Crypto Bull, Jim Ropel. He and I in our monthly market report on Monday. This was one of the top trade ideas that we discussed. And it really picked up steam as the week went on.

16:13Alissa Coram:Yeah, I do have a position in this myself. that I started at around 50. Sometimes I have to sell it when we're putting it on swing trader. So there's been a little selling and then buying it back after the 30 minute restriction period is over. So I'm not sure what my true cost is now, but yeah, this was a nice setup. And it's been a little tough because some of these areas that have looked really good, it just didn't seem to be getting traction for a little while. But look, that's what happens sometimes when a stock or an ETF consolidates. And that really just looks like what was happening here.

16:52Alissa Coram:So you did have a chance to add to positions. I added to my position this week. I added actually a little bit more today. I started adding two days ago and then added a little bit more today. So really strong look, you know, for for the Bitcoin.

17:08Justin Nielsen:And the action comes ahead of Crypto Week on Capitol Hill. So maybe we'll see some interesting headlines develop out of that. And then we also wanted to take a look at NLR tracking the uranium and nuclear space, Justin.

17:25Alissa Coram:I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm. At Baird, our 5 ,000 plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets. Learn more at rwbear.com slash WSJ. Yeah, so this kind of will tie into one of our first stocks because Constellation Energy is the number one holding in NLR.

18:05Alissa Coram:But you've got a lot of stocks that are looking very interesting here. And, you know, some of them are a little bit tough to hold. They have these very high ATRs. And so this is a way to kind of participate in that. A lot of people are of the belief that nuclear is going to be a way for us to get our power an easier way because we have so many power demands, whether it's AI, whether it's EVs, you know, electric vehicles, you know, just upgrading infrastructure. there's a lot of reasons why we're going to need more power. And uranium nuclear might be one of the reasons or one of the ways to provide that.

18:41Alissa Coram:So NLR has already had a nice move off the bottom from April. And this consolidation, this pullback was pretty ideal. It was very, very reasonable and came right into that 21 day moving average line. Another member of this group is CCJ. I do have a position in CCJ. And I should also say I bought NLR today after we put it onto Swing Trader. But yeah, CCJ looks very similar. This is a miner of uranium, support of the 21-day moving average line. And then you also have some of these that are a little bit more newer, right? Like your SMR.

19:21Justin Nielsen:Yeah.