Indexes On The Verge Of New Highs. Is The Chop Over? MongoDB, StoneCo, EBay In Focus.

0:18Good afternoon, everyone, and welcome to Stock Market Today for Monday, October 20th. It's Alexis Garcia here. And stocks were on the verge of new highs as tariff tensions seemed to cool down a bit. We also have a host of high-profile earnings reports coming in this week, Tesla and Netflix leading the bill there. And here with me to help break down everything you need to know about today's market action is IBD Market Research Director Justin Nielsen. Am I on here?

0:55Alexis Garcia:Oh, there he is. There you are. We're having a... Amazon's causing a fun day for all of us today. But Justin, I was saying in the comments, seems like everyone's excited about the green day we had in the market today. So what do you have on tap for us today? Yeah, we'll take a look at a few stocks. It's not easy, you know, when you have up days one day, down days another. Not using green greens. Exactly. So there is still some reason for some hesitation, but we'll talk about that a little bit. We'll also talk about a few stocks, including MongoDB, StoneCo, and eBay. All right. Well, we will get to those three stocks, but let's check in with the major indexes.

1:37First, the S &P 500 finishing the day up over 1%, the NASDAQ up 1.4%, The Dow up 1.1%. And small caps, the big gainers today, 1.9%. So Justin, I'm going to go ahead and get my screen share going here and bring up the charts. Let's go ahead and look at the S &P 500 first. And as you were saying, getting near these all-time highs here. So talk to me about what you're seeing because we had that really ugly downside reversal day. that Friday. There was a lot of chop over the last week, but this seems to be sending a clear signal that the markets just want to move higher.

2:20Alexis Garcia:Yes, there is absolutely a lot of resilience here. And again, what we've been using is that December 18th, if you kind of just highlight that day, it was a big drop in ATRs. That's average true range. It had a very similar look because we had been trending very nicely and then whoosh, right down. Now, one of the differences is for December 18th, we did undercut our 50-day moving average line. We didn't do that in this case. We got support like back in December. We did have a couple days later, we had kind of a test of that Friday low in December. It undercut it and then came back almost to new highs.

3:00Alexis Garcia:And then it kind of started, again, getting really choppy. So our expectation here is for choppiness, right? That's That's what typically happens after you have a big break like we did on October 10th. There usually is some recovery. You know, you just don't break your ankle and say, OK, I'm going to go run a marathon. It's usually some recovery time. But look, there are those cases where you go to new highs first. You can actually make quite a bit of progress. Sometimes the market just shakes it off, especially if it's a news event that gets resolved fairly quickly. I don't know that we're at that point yet.

3:35Alexis Garcia:I don't know that we can necessarily plant our flag of victory saying, hey, all of this tariff stuff is behind us. But, you know, things seem to be moving in the right direction and the market seems to be kind of putting a positive spin on this. So the Nasdaq and S &P 500 are both right around that Friday high. I think that Friday high is going to be the October 10th high is going to be one of those critical areas to look at. but we have a number of things that we're looking at in terms of our check boxes in order to tell us, hey, it's okay to get back in. And by the way, these are some of the same checklist items that we were using back in April when we had the follow-through day on April 22nd.

4:14Alexis Garcia:What are those things? Well, we're looking for a close above the 21-day moving average line. As of today, check. The low above the 21-day moving average line. This is the first time for both the NASDAQ and the S &P 500 since October 10th that we got that. So we've got another check mark there. Now, another item we would like to see is three to five days of that low remaining above the 21-day moving average line. So not only can the low get above it, but it can stay above it. And that means that we're kind of trending. So those are some of the things that I'd be looking for in order to get more and more exposure.

4:50Alexis Garcia:So that's where we're at right now. It's worth mentioning because you brought up how strong the small caps were, Alexis, and how they were leading today, the Russell 2000 has already gotten above its October 10th high. It did that just a couple days later. So it was showing this extraordinary amount of strength, diverging from the other indexes, but then it too came down, but it got support right at its 21-day moving average line, but we're back to that checklist. Okay, we've got the close above the 21-day moving average line, the low above the 21-day moving average line. And in this case, we're actually above the high of October 10th.

5:28Alexis Garcia:So right now, the small cap index does look a little bit stronger than the others. All right, Justin, that's a great checklist to keep handy there. So thank you for sharing that. So we look through the indexes. Let's just check in on RSP. That's the S &P 500 equal weighted ETF. Just get a sense of market breadth for today. This was up 1%. And again, it looks like it was holding at that 50-day line, charging higher, retaking that level, and the 21-day? Yeah. So again, we're kind of getting some of those checklist items here on RSP. A lot of times when we look at SPY, one of our first questions is, okay, was it the MAG-7 that was kind of creating this?

6:09Alexis Garcia:And so we'll look at FNGS sometimes to say, okay, was it more of these mega caps? And look, the mega caps were definitely doing a lot of heavy lifting. You see a 1.97 % gain. So So absolutely, those were kind of pulling the S &P 500 along. But with RSP showing a 1 % gain, that's no slouch, right? So it's not like there was, you know, that it was all the mega caps. The RSP is equal weighted, meaning that there was kind of some broad participation among a lot of the S &P 500 members today. And let's just take a look at QQEW very quickly. that's the NASDAQ 100 equal weighted ETF. This one also up about 1.4 % today.

6:54Didn't close below the 21 day on Friday's session, but again, looking strong here. And again, a lot of tech names. I think Apple was definitely a standout today here, Justin.

7:06Alexis Garcia:Yeah, absolutely. And so, yeah, again, a strong day here on the equal weighted NASDAQ 100. So again, that's a good look, right? When you've got this going up just as much as the NASDAQ 100 that's market cap weighted, it tells you that there's a little bit more participation. Now, granted, the NASDAQ 100 is, of course, only 100 stocks, very tech heavy. These are the top 100 stocks on the NASDAQ that are non-financial related. And right now, with what we saw last week with some of the financials taking some hits, that's probably a good thing for the tech NASDAQ 100, but, you know, very strong. And you know worth just doing this as our bonus stock.

7:49Alexis Garcia:I do have a position here, but this did look very strong today. We added it to Swing Trader. I bought it after the 30-minute restriction period, but it came up above that$259.24, or even if you wanted to use the$260.19 from all the way back in December. So while this hasn't really participated as much in this rally, not nearly as strong as the S &P 500, for instance, but it has started moving up that right-hand side. And again, you had a little bit of this handle that it formed and broke through it in some very nice volume. One of the problems that we're going to be facing, though, with a lot of stocks and a lot of setups right now, earnings.

8:31Alexis Garcia:Earnings deluge is coming. I know you and Ed do a great job. We've got earnings in another week or so for Apple. Yeah. So I know you and Ed are going to be hammering this home every Friday, the earnings cheat sheet. So something that is definitely worth watching, because that's going to be one of the big contentions here. You got some setups, maybe you raised cash over the last couple of weeks and you want to get back in, but getting back in is going to be meaning you have to be very aware of those earnings reports coming up. And let's take a look at iBit really quickly. That's the Bitcoin ETF.

9:04This went up 4 % today, Justin, and probably some welcome action here after this long slide. So talk about what you're seeing here with Bitcoin and the move today.

9:17Alexis Garcia:It was a little vicious, right? You know, you normally don't see that many days down, especially with some of them being down as much as they were. So when you get a steep downtrend like that, you've got to be very careful. How does it rebound? I mean, right now, the rebound, it's got a lot of work to do. It's not even back above its 50-day moving average line. So while it's good that it got that support at the 200-day moving average line, some positive action there. And look, there's a lot of people that look at that 200-day line and say, hey, this is an opportunity for me to get Bitcoin at a pullback.

9:49Alexis Garcia:But you also have to remember, you've got that 50-day moving average line. Sometimes I call this no man's land, because what if it gets resistance at the 50-day and you just bounce around back and forth between there? So this might need a little bit more evidence that this is truly out of the woods, but it's worth keeping an eye on. And let's take a look at GLD, Justin. That's the Spider Gold Shares ETF. I mean, this one just continues to move up 3.6 % today above this profit-taking zone here, rising above the 400 level here, Justin. So thoughts on gold? Well, look, on Friday, if you had asked me, I would have been like, oh, well, this is done.

10:29Alexis Garcia:You know, it's obviously, you know, running into some trouble, especially if you looked at GDX, which is the gold miners. The gold miners were down almost 7 % on Friday. So it looked very, very toppy. But, you know, today, gold right back at highs. Now, GDX is still an inside day. So the gold miners are still not necessarily out of the woods. Some of those don't look as strong. But gold definitely is, you know, shaking off that weakness of Friday and right back at highs, as you mentioned. So I should say one other thing that is kind of a positive about all of these ETFs and everything that we're looking at, in addition to the market indexes, is where they closed today.

11:11Alexis Garcia:That was a big question. A lot of times you get those Monday gap ups and then you see these fades into the close where you get a little bit of a mixed signal. But one of the positives today was that a lot of things closed in the upper part of their range, even the upper quartile in a lot of cases, not just the upper half. So upper quartile. So very strong action into the close, holding the gains, holding the gap ups. That's a that's a positive. This podcast is brought to you by MassMutual. For 175 years, MassMutual has been there for policy owners, financial professionals and communities through economic shifts and societal change.

11:50In a world that changes fast, strength and stability still matter, especially when it comes to helping people secure their future and protect the ones they love. Learn more at MassMutual.com. That's MassMutual.com. Thanks for pointing that out, Justin. And let's take a look at some individual stocks, starting with MongoDB. That's ticker MDB. This up 2.8 % today. And again, closed above the 21-day line on Friday and continued to charge higher today, Justin. So what are you liking about this chart?

12:28Alexis Garcia:Well, number one, the move that it had on its last earnings report. I mean, it just, when you get a big gap up like that, it just kind of really makes a mark and says, hey, this is something where this was undervalued. A lot of people were not thinking, you know, that this was going to be as strong as it was. That was up almost 40%. But what's even better is after that earnings report and after that huge gap up, people didn't want to sell. You know, there was no like, oh, well, let me get out of this because I want to take my profit. They really got comfortable with that higher valuation. And so here we are, you know, we just basically based right above 300.

13:07Alexis Garcia:And let's look at the depth of that 11 percent for that flat base. So very nice consolidation of the gains. And we're seeing that support right at the 21-day moving average line. Forget about the 50-day moving average line. It didn't even come down there, even though that is rising up considerably to come meet it. But this is holding well at the 21-day moving average line. Didn't really give up much ground, even with as ugly as a lot of things got. An 11 % base is pretty good looking. And if you go to the weekly chart, you really see how much this is kind of tightened up. And it's just kind of, again, let that 10-week moving average line catch up to it.

13:44Alexis Garcia:really hasn't given up anything. So I would also mention that one of the things that I do like about MDB is this has some pretty good earnings growth chops. It's got, you know, just looking at the last few quarters, 21%, 49%, 96%, 43%. That's really decent. And look, the revenue growth is no slouch either. Every quarter of the last four quarters going back is at least, you know, 20%. And it actually, you know, that extends to, you know, there's one quarter previous to that that was 13%. But before that, they were all up over 20 % as well. So this has a very strong fundamental side as well as a great looking chart behind it as well.

14:32All right. Well, let's take a look at Stone Co. Justin. That's ticker S-T-N-E. This one up 4.5 % today. and again, charging above that 21-day line, Justin?

14:46Alexis Garcia:Yeah, so look, this is a Brazilian company. There was some strength in Brazilian companies today. EWZ is a ETF that you can kind of follow to get a sense of what's happening in that country. You know, looking at the MSCI Brazil 2550 index. So yeah, taking a look at a strong move there, you start thinking about some of the strong areas in Brazil And Stoneco is definitely one of them. So this is in the financial space with in that credit card payment processing company. And it has that support right there at the 10 day, the 50 day moving average line back above the 21 day moving average line. Really strong action, kind of breaking a downtrend here.

15:31Alexis Garcia:So this is something that's on my radar. Another one. Let's just give honorable mention in Brazil to ERJ doesn't quite have as strong of the fundamentals. But look, a lot of times that's a little bit harder for some of these aircraft makers. But ERJ in Brazil, this is also kind of tracing out a nice flat base here and back above the 50-day moving average line. All right. I love we're hitting all the Brazil stocks today. So let's take a look at eBay then, Justin, to wrap that up. That's ticker eBay, E-B-A-Y. This up almost 4 % today, Justin. and again, retaking that 50-day line in a powerful way, closing at the top of that range as well.

16:14Alexis Garcia:Yeah, and here again, we have something that really didn't correct too much, just a 15 % correction while it kind of carved out this flat base. So there's a lot to like about this chart. And I would argue that this is actually giving you kind of an early entry. Rather than wait for 101.15, it feels like there's kind of a lower area of resistance that it just kind of crossed over. So yeah, I think this is offering an early entry. I like the look of this chart. Now, the one thing is, and again, this is just a reminder of some of the problems we're going to run into here shortly. We've got earnings coming up.

16:50Alexis Garcia:So I'm sure this is something that you and Ed are going to cover shortly. We did have some nice volume today and nice volume on Friday. But this also is a little bit more lackluster in terms of the fundamental side. The growth, you know, it's decent. it's double digit on the earning side, but single digit on the revenue side. So this is one of those things where you got to remember a lot of times for the IVD methodology, we do like to combine the fundamental and the technical action to really get the best performing or the best potential movers out there. So this has a pretty good looking chart, but a little bit left to be desired on the fundamental side.

17:28All right, Justin. Well, thank you so much for your insights today. And as we all know, you're all over the place for investors.com videos. So what do you have coming up this week?

17:41Alexis Garcia:Yeah, so we've got another busy week. We've got Tom Basso that's going to be on our podcast. He's a returning guest from the, he was featured in the Market Wizards. He's known as Mr. Serenity. So he's going to talk a lot about how he's handling this volatility. And you better believe he's bringing serenity to his methodology. We're also going to have Laosh Mikulkas on IBD Live on Friday. So that's going to be a great conversation. He was on my podcast last year as he was looking at a 900 % gain for his personal portfolio. He actually is out in Europe. And so he has a full-time job. And as soon as he finishes that, it's right about the time that the market is about to open here in the U.S.

18:23Alexis Garcia:And so he plays the market until all odd hours. And yeah, he did a really bang up job in his personal account last year. So we'll talk to him about how that ended. We're kind of going to get a little bit of a recap there, I'm sure, from him on IBD Live and how he's been handling this year. So it'll be interesting to talk to him. All right, Justin. Well, sounds like a great lineup. And thank you again for sharing all your terrific insights with us today. And that wraps it up for this installment of Stock Market Today. If you want more market analysis, be sure to tune in to IBD Live tomorrow morning.

18:59that goes live as the market opens. You can go to investors.com slash IBD live for all the details there. And thank you so much for watching. And we'll see you right back here after the closing bell. Savvy investors understand consistent growth is built on scale, resilience, and trust. For more than 60 years, Medline has proven this, driven by an unrelenting commitment to their customers. Today, Medline is proudly NASDAQ listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. With a focus on what healthcare needs next, Medline strives to make healthcare run better.

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