Market Has Another No-Good-Terrible Week; Apple, Enova, Crane In Focus

20:16Alissa Coram:Yeah. And this is where I think the 1999 precedent that you were bringing up has a lot of reasons to be optimistic. Because not only, you know, in the same way that, OK, maybe this hike cycle is something that, you know, puts some negative pressure on it. We still have this technology that has a lot of potential. You know, we still don't really know the potential. I mean, even at this time, think of what the Internet was doing in the late 90s and think of what what happened just a decade later with the iPhone and how much that changed the use of this Internet infrastructure when we had a different way to access it.

20:57Alissa Coram:So in the late 90s, just the reminder is that even after coming up all this way and after a lot of people were saying, well, gosh, there's all these Internet companies, they're just slapping dot com on their name and that's their business model. A lot of Wild West type stuff happening in terms of the gold rush type thing. But what happened during this time period is that you did have a lot of chop, a lot of slop, a lot of big downturns in the NASDAQ. Here again, S &P 500 and the Dow Jones Industrial Average, not nearly as volatile as what was going on with the NASDAQ. A very different look for these.

21:41Alissa Coram:They were just really kind of out of sync, you know, because, you know, you got to remember that it wasn't until much later that the S &P 500 and the NASDAQ, you know, became dominated by the same big companies. You know, it really stuns me that, you know, when I kind of started, you know, your biggest market cap leaders were like ExxonMobil, you know, and things like that. It was, you know, Cisco was was up there, but, you know, it was it was a very different thing. So you had the extra volatility. You had a lot of this chop. But yet we still when we came out of it in late nine ninety nine, you had this phenomenal move.

22:26Alissa Coram:And if you look, there were plenty of people that were bearish and shorting all along the way here. and they got their heads handed to them because they were right in the long run. They were just early. And being early here in terms of your bearishness can be very detrimental because not only do you miss out on the big move that is possible here, but you also put yourself in a position that maybe you're on the wrong side of things. And this was a freight train running a lot of these folks over.

22:59Justin Nielsen:All right. Well, a tricky market, and I think that's the other thing, too, is what we're going to have to navigate is balancing the index-level technical analysis with, all right, you know, how are the leaders acting underneath the surface, right? Because I think if you're just going by the indexes, you know, if you're getting this chop, you might miss underneath the surface some of those leaders.

23:27Alissa Coram:Yeah, it's a big balancing, a big balancing act of indicators. You know, you want to be careful because it's very easy to have too many indicators and then they give you contradictory signals. Right. And that that can just add confusion. It adds noise. And this is also the problem of having so much information at our fingertips sometimes that you get too much contradicting information. But at the same time, you can't just use one indicator because one indicator is not enough. You know, it's different markets require different different looks. So I think keeping it's almost like have as few indicators as you can get away with to give you a complete picture.

24:09Alissa Coram:And you named off a lot of the things. Yes, you want to look at the indexes and you want to look at what the market is doing, but you need to look at what your portfolio is doing. What are the leaders doing? What's showing relative strength? And what are the past leaders doing? And what are the ones that are showing relative strength right now doing as well?

24:27Justin Nielsen:Good stuff. All right. So bringing it back to the current market, and then we'll get to some individual names. It seems like, Justin, at this point, you know, thinking of your approach, the IBD approach, also Webby's approach, some sort of reversal, right? What we would be looking for now is a reversal with a strong close, perhaps for aggressive traders, setting your stop at that low, or it depends on where it is, what you would be looking at as sort of a way to get your toe back in the water here. But really, you know, we want to see more evidence that the market is in the indexes are doing some of that repair work.

25:12Justin Nielsen:So that way we feel like the wind is at our back and not in our face.

25:17Alissa Coram:Yeah, absolutely. And this is where, again, sometimes the headlines can steer you wrong. We have certainly seen, you know, in the very recent past, how if you were given the headline, you would be scared, you know, scared senseless, you know, investing in the market. But yet that was the right thing to do. So at the end of the day, we have to look at the charts. And so, yeah, I think being on the lookout for reversals as a way to get upside reversals specifically. Where you see kind of an undercut of an area happen and then a close in the upper part of the range. And frankly, we've seen a few of these upside reversals along the way here.

25:54Justin Nielsen:Have to have a stop, right?

25:55Alissa Coram:And they haven't held, you know. So, yes, you have to know, OK, this is where I'm wrong. if I start making progress and then I keep on hitting my head and the progress stops, I might have to take more defensive action. Just because you get an upside reversal does not guarantee success. We saw that with your 2021 precedent. You had a great reversal there and it just didn't last. It rolled over pretty quickly. So you have to have kind of that mindset of, yeah, I'm not going to put all my chips in right here, but dipping toes in the water, getting some exposure, seeing if you can get some traction is a pretty good way to go.

26:35Alissa Coram:And then, of course, you know, at this point, I feel like we really kind of need, you know, need a follow through day. We haven't quite gotten the same, you know, downtrend as when Bill O 'Neill, the founder of Investors Business Daily, wrote How to Make Money in Stocks and shared his concept of the follow-through day as a market timing signal to get back in, you really had kind of more of a prolonged downtrend in a lot of those examples. But, you know, we have had quite a bit of damage done in the NASDAQ, more so than any of the other indexes. And so I think for the NASDAQ, at least, it seems like we would need to have a follow-through day where you have to start with a rally day.

27:12Alissa Coram:And we don't have that, you know, with the last two days. We need to start with a rally day where we close up or at least in the upper part of the range. And then on the fourth day or later where we see a powerful day, hopefully with volume coming in higher than the previous day. And that's not a guarantee of success, but at least says, hey, this is a trend that might be changing. Be on the lookout and see what's working.

27:39Justin Nielsen:Exactly. And then we also have IBD senior market strategist Mike Webster's trend change checklist. And one of the things that he looks for is a close above the 21-day, a couple of days with the low above that level, and continuing to make progress there. So just that was the CliffsNotes version. He would take 30 minutes to tell us, but that was the sub-30-second version.

28:04Alissa Coram:And what's been tricky is that we keep on seeing the low get above the 21 day moving average line. It just isn't staying above it, right? You need to have those days, the staying above it. That's what we're missing. And that means that we're missing the trending part. So as much as we haven't completely fallen apart, we just can't trend. And that makes it very hard to get traction in positions. So if you're swing trading, it can be very difficult because, you know, things aren't holding for more than a couple days before they roll over. Position trading, sometimes if you've got a low cost, you can weather the storm through that.

28:48Alissa Coram:But if you're buying things more recently, you're just getting shaken out. And look, that's where I've been. Anything I've bought recently, I'm getting shaken out. And that tells me something. That is the market giving me feedback.

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29:37Justin Nielsen:And Apple, look at this, very different than the other magnificent seven names. Shares up 3.5 % on the day. It's been a pretty great month for Apple. Let's take a look at the monthly gain at 15 % so far in the month of July. It's at all time highs here. And it seems like this has now turned into sort of the quote unquote, until earnings next week, we'll see. But for now, sort of the safer bet on AI, they've been more cautious, haven't poured as much capital spending into the AI build out like the other hyper hyperscaler names. So seems like with a lot of the other tech names out of favor, if you want to still be in tech, it seems like the money is rotating here, Justin.

30:32Alissa Coram:Yeah. And what was funny is that for a while there, it seemed like it was the non-participant, right? Google Alphabet was the one that was the must-own for a while there and the one that was holding up the best, and Apple just wasn't participating. So again, you have to be flexible and recognizing where the leadership is. And let's not forget, July was a really good month for Apple. In fact, at kind of that peak that we saw on July 17th, Apple briefly overtook NVIDIA as the number one most valuable company in the world because chips were coming in, NVIDIA was coming in, and Apple was making new highs.

31:15Alissa Coram:So it's right on the cusp of doing that again after today's move. So we'll see if this can overtake the throne. But yeah, it looks strong. Now, the problem is, as much as this is a decent look, you got earnings coming up. And that's the case for a lot of stocks next week. So July 30th, I believe, after the close on this one, which is my son's birthday, he's going to be 12. So yeah, he'll be getting to celebrate with Apple. Or maybe he'll be bummed. I don't know.

31:49Justin Nielsen:Yeah, well, hopefully there will be one good earnings report on his birthday. But we'll see. We'll see what happens there.

31:58Alissa Coram:But look at that relative strength line. And this was this was a swing trade that we had on Swing Trader. I actually wrote my column on it this week, but it came right down to the top of that base, got support, and it looks like it's bouncing there. So this looks like it could absolutely go higher. It's really been a different stock since it overtook that 50-day moving average line more recently. And again, had a great July where most stocks were having a very difficult July.

32:26Justin Nielsen:Okay, next on our list is ENVA, perhaps what our friend Leif Sarada would call one of the randoms on the move here. ENVA and the Finance Consumer Loans Group shares were up 9 % today, so a high-octane move for something that is kind of in the boring-type category, Justin.

32:54Alissa Coram:Well, and you know, one of the things that kind of put this on our radar is you see those little black marks there. That's our ANTS indicator. And when something has a good move and volume is behind it, and you can see if you just kind of match that, this had such a strong move in a short period of time, and there was a lot of volume coming into that. And that usually reeks of institutional involvement, right? You know, when institutions sometimes get hot and heavy on something, it's very hard for them to hide their footprints. And so that's what the ants kind of tells you is that there's really some big movement in the price and there's some volume behind it.

33:34Alissa Coram:Now, we don't like to use this as a buy indicator. This is actually a lot of times what we see is after these ANTs happen, you actually do go through some type of pause, some type of consolidation. And that's exactly what we got here for ANOVA. This is in the consumer loans. There's a lot of members of this group in this area that seem to be getting some traction. And so on its earnings report here, we got a night. And yeah, I'm glad you went to the weekly chart because it's such a nice kind of consolidation that we saw here. It had that strong move and really consolidated in a nice, tight way.

34:10Alissa Coram:And remember, you got to contrast this with what was going on with the indexes, you know, a lot of just sloppiness and choppiness, especially with the NASDAQ composite. And so the fact that this was able to hold as well as it did, and now we've got the catalyst of earnings that kind of really launched this up in a big way. This, I think, you know, again, it's a smaller company, only, you know, a five billion market cap. But this is certainly, I think, one to watch. It's already had a lot of growth potential. A new CEO, you see that mark on our market search chart not too long ago. A lot of times that can be a catalyst.

34:47Alissa Coram:the earnings and revenue numbers here are very solid. You can see, you know, going back for the last few quarters, a high composite rating, high EPS rating, high RS rating. It's got a lot of those IBD ratings really looking favorable. And now that we have earnings behind us, that kind of takes something out of the risk factor there. So certainly one I'm going to be watching a lot closer here myself.

35:17Justin Nielsen:Okay. Let's also take a look at ticker CR. This is crane in the industrial space. Very orderly action for this name amid the market chop. We'll go to the weekly chart here too. Yep. It looks like, is this four or five weeks tight? Yeah. Four weeks tight. Now moving out of that This week shares up over 3 % on Friday. So actionable in the industrial space, except, Justin.

35:47Alissa Coram:Except, yes.

35:50Justin Nielsen:Earnings early next week.

35:51Alissa Coram:Early next week, yeah. Four days away, and we've got two of those days as a weekend. So, yeah, this is a problem that we're seeing a lot out there because with so many earnings next week, some of the setups that you're seeing, if your company doesn't have earnings, Maybe a competitor does, a supplier, a vendor. And you got to remember, all of those can have an effect on your stock as well. Just like what we saw with the alphabet earnings and the memory chips. You know, that was a positive one, but you can see negative reactions as well. So as much as I like the move here and I like what's happening, I like how this got clear of a lot of this resistance and after holding tight.

36:31Alissa Coram:And look, this was a stock that was holding above its 21-day moving average line, whereas a lot of stocks were losing their 50-day moving average line. It's in a completely different, you know, kind of area that, you know, away from that tech space, a little bit more on the aerospace, defense, space industries. So while it is general industrial, it's exposed to some of those areas that we have seen taking up the mantle, you know, from some of the AI trades. So I think it's a good look. I think it's an interesting company, but I'm going to wait for earnings. But that could also be something you keep it on your eye, you know, you keep it on your watch list, you keep your eye on it.

37:11Alissa Coram:And a lot of times those earnings can be a catalyst, but I'm not going to try and anticipate and step ahead of that. I'm going to wait and see what those earnings bring us.

37:20Justin Nielsen:Makes sense, Justin. All right, let's talk about the battle plan for the week ahead. You said it almost, what, 200, if you're rounding, S &P 500 companies reporting next week. It's going to be a busy week for earnings season. We have Mideast tensions to be thinking about, upcoming Fed stuff. So talk to us about how traders should be thinking about and preparing for the week ahead.

37:48Alissa Coram:Well, I think, you know, this is where, for me, I kind of try and counsel myself patience, right? I don't want to be trying to jump the gun and anticipate what I think is going to happen because what I think just doesn't matter. And even to that end, with a lot of these headlines, it's not the headline itself that I want to have a knee-jerk reaction to. I want to really see what is the market reaction? What is the chart telling me? Where are those levels of support and resistance? And a lot of times with as many headlines as we have, our friend Jason Shapiro, who has been on the podcast a number of times, he, of course, was one of the market wizards featured in Jack Schwager's books.

38:32Alissa Coram:He refers to the news failure event. Sometimes what you can have is you can have a headline that comes out and the reaction, while it might go in a direction for a little while, by the end of the day, the reaction is completely the opposite of what you would think. And that can be on either the positive or the negative side. Great example was kind of at the lows of 2022 when the CPI report that came out at the highest, you know, in years, decades at 9 percent. You know, we, of course, got slammed in the market to start the day, but finished way off the bottom. And that was that was the bottom, you know, in 2022.

39:12Alissa Coram:So I think with as many headlines as we have, we really want to be aware of how the market is reacting to these headlines. And look, the Fed, a lot of times there's some volatility between the time of the announcement, the press conference, the algos reacting, the reaction to the algos reacting and the counter reaction. A digestion period. Exactly. There's going to be a lot of, or indigestion sometimes. There's going to be a lot of that, I think, that we need to filter through with the earnings. Again, patience, because sometimes your reaction in the aftermarket or in the pre-market can be very different from what the actual stock does during the trading day.

39:55Alissa Coram:So I think, again, a lot of patience has to be employed here. And incremental decisions.

40:02Justin Nielsen:incremental decisions. It doesn't have to be all or nothing.

40:04Alissa Coram:A few things for people to check out. Make sure that you're looking at the IBD action plan. There's a lot of those things. Hey, this is what's coming up. Make sure you're aware of these things. Ken's got his earnings preview. It was a real big, if you're looking at the paper, just know we battled with this because Ken had so much in his article and we had so many stocks that we needed to put in there. I, you know, I think I I started with 60 and we had to whittle it down to 30 or something like that.

40:32Justin Nielsen:And again, that was over. On a big earnings week.

40:35Alissa Coram:Yeah, yeah. So I think we maybe settled at 50 or something like that. But yeah, a lot to look at. The action plan is going to help you with that. The earnings preview column, earnings calendar. Earnings cheat sheet. The earnings cheat sheet. Yeah, from Lexi and Ed, you know, from on Fridays. And of course, you know, we have our economic calendar available on investors.com. So, again, a lot of things to just make sure you are aware of as you as you go through and look, set the levels, you know, look at those levels, look at those areas of support that, you know, if we break those areas of support, what's the next area of support?

41:10Alissa Coram:and what is it that you're going to be looking for in the charts to tell you, hey, it's time to get going potentially and what stocks are top of your list because you don't want to say, hey, the indexes are giving me a signal. Now let me go look for what I want to buy. You want to have those kind of at you ready. So you have the best the best merchandise, you know, already in your shopping bag. It's just a matter of, OK, this is what I'm going to start paying for right now.

41:35Justin Nielsen:Yeah. And I think in terms of stocks that you do own in your portfolio, think about your cushion, right? You and I have talked a lot about what is the options market expecting? Do you have enough of a cushion to withstand the, you know, quote unquote, worst case scenario roughly or 1.5 times the market maker move to the downside, something like that. And the other thing that I would think about, we talked about this earlier this week. I'm not sure if it was with you, Justin, or on another SMT episode, But I think Google was a great example of don't count on one of these AI companies, whether you own them or not, or whatever company for that matter, to save the day for the market, right?

42:20Justin Nielsen:And to lift everything. It could happen and we'll get more bullish if we do see those signals. But if you're sitting on stocks that you're down on heading into earnings, you know, you don't want to have that hold and hope mentality trip you up in such a critical time like this.

42:39Alissa Coram:Hope is not an investing strategy, right? So very wise words there, Allie. All right.

42:44Justin Nielsen:You too, Justin. Good stuff. We're done for the day. So we appreciate your take as always, Justin. Good stuff.

42:52Alissa Coram:Thank you.

42:54Justin Nielsen:And thanks everyone for tuning in. That's it from us for today. We hope you have a great weekend. We'll see you Monday morning on IBD Live starting 10 minutes before the opening bell. Investors.com slash IBD Live for all the details. We'll see you there. And then we'll also see you back here Monday after the close.

43:25Justin Nielsen:This show is for informational and educational purposes only, and nothing should be construed as a recommendation to buy, hold, or sell any securities. Any securities and investment strategies discussed may not be suitable for all investors. Make sure to consider consulting with your financial advisor before making investment decisions. Over 60 years, Medline has demonstrated a track record of delivering consistent growth. Today, Medline is proudly NASDAQ-listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. See how Medline makes healthcare run better at Medline.com.