Market Still Hesitant, But Resilient; SiTime, Amphenol, Halozyme In Focus

0:10Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, August 17th. Alissa Coram here. I'm so excited to talk to you about the market today and doing that with me right now is my colleague, Justin Nielsen. Stocks kicking off the week in negative territory amid rising oil prices, but we are still resilient, aren't we, Justin?

0:34Alissa Coram:Yeah, and I had a surprising large number of stocks to choose from for a day where most of the sector ETFs were down, the markets were down, and yet there were still a lot of stocks that looked very interesting. But we'll stick with a few, including side time, which is something that we've been talking about over the last few days. I do have a position in this. Amphenol, I re-bought this one today. I had gotten shaken out before. We also put this one on Swing Trader and Halazyme. A lot of interesting biotechs. This is another one that went on Swing Trader. I don't have a position in that one, but maybe I will.

1:09Alissa Coram:So we'll see. Not yet.

1:11Justin Nielsen:Three compelling names to discuss there. Yeah, always good when the shopping shelves have merchandise. Right, Justin? Yeah.

1:21Alissa Coram:Now the trick is, will they get some traction? That's been the trick.

1:26Justin Nielsen:So that's what we need. All right. Well, let's take a look at the major indexes. Here's the Nasdaq composite down three tenths of a percent on the day. Meanwhile, the S &P 500 and the Dow both down a half a percent on the day. You can see the S &P coming down to the eight day moving average there. And here's the Dow. We have now undercut that gap up low from the other week. So just wanted to note that we still are above the 21-day line. And small caps on the day, down about 0.4%. Looking pretty strong here, Justin, near highs.

2:04Alissa Coram:Yeah. And if you want to focus on the positive, that's where you look. Because even IWM, the Russell 2000, on Friday, when a lot of the indexes were down, this one looked very different. You know, all the indexes closing down at their lows, kind of. or not the lows, but, you know, in the lower, lower half, lower quartile. And Russell 2000 looked very good on Friday. And today, yes, it was down, but inside day, you know, holding a lot of those lows. Whereas, as you noted, Ali, there were a lot of these other indexes kind of, you know, taking out lows, areas that we would have liked to see them hold.

2:43Alissa Coram:But yet, again, there's It's just not like a lot of huge breakdowns. It's like a little bit of this rotation feel. You know, some of the software stocks that were really, you know, rocking and rolling. They, you know, are taking a little bit of a pause. So it's not like a complete breakdown. And as I mentioned, there's still a lot of merchandise on these shelves that look very interesting. You know, it's just a matter of in terms of the headline, I was going to say, come on already, let's go, you know, is what it kind of feels like.

3:15Justin Nielsen:Yeah. And let's also take a look at RSP. We like looking at that as a measure of breadth. Interestingly, down nine tenths of a percent here today. So sort of an outsized decline on the day. Yeah.

3:29Alissa Coram:And interestingly enough, let's pull up QQE as well. I was a little surprised by this because QQE was down pretty considerably compared to QQQ. And, you know, I think that was only down like a tenth or so. And yet the Magnificent 7, which you would normally imagine would make the QQQ come down more, this was down a whole one and a quarter percent. Ali, I'm confused. I've got to do a little bit of figuring out what's what's happening here, because this really did baffle me how some of these equal weighted were were getting hit, you know, so hard with the Magnificent Seven looking really poor. And look, there are a number of names here that have just kind of, they're not doing as great, right?

4:18Alissa Coram:Amazon was looking interesting, you know, looking like a setup. I bought this and then it just slowly was grinding lower. I had to sell. Meta still hasn't, you know, come back on board. Tesla still not doing great. You know, it's off its lows, both Meta and Tesla, but still below moving average line. And so, yeah, the Magnificent Seven is not where it's at right now. Let's just say that. But today, I think the big thing was that we had a lot of the ETFs, a lot of the sectors were down. I'm looking at my kind of sector ETFs. And really, the only ones that were up were energy. And surprisingly, XLK, the technology, was slightly up.

5:03Alissa Coram:So, again, while the equal weighted was down, technology was up slightly, equal weighted cues, technology was up slightly. So there's still technology stocks that are looking very interesting out there.

5:17Justin Nielsen:Exactly. And that will be a little bit of our focus for the individual stocks of today's show. But there was definitely a tech and an AI flavor to this morning on IBD Live, I would say, in terms of what was moving outside of software, outside of the mega caps. I did pull up the IGB ETF. Let's also take a look at SMH. I feel like, Justin, we are now in a bit of an environment where it's not all chips are winners, but maybe selective leadership back in interest from the chip sector.

5:57Alissa Coram:Absolutely. And look, we can't ignore the fact that if you pull up DRAM, some of these memory stocks, you know, while again, these are kind of both in the chips and hardware peripheral area that we have them in, you know, yes, it closed off its highs, but that was still up over 5%. You know, that's not nothing. And it certainly has come up very strongly off the bottom. and you know we were speaking of and we'll speak a little later on a chip stock you look at nvidia and you might be a little underwhelmed you know oh you know this wasn't a great day for it but again this one got support of the 200 day moving average line and has really come up very strongly but then you look at things like teradyne which we were talking about on ibd live this morning and very strong.

6:47Alissa Coram:Great day there. Yeah, so up significantly. So yeah, very, very select, very targeted. This is why I think a lot of people are still referring to this as a stock picker's market.

6:59Justin Nielsen:Mm-hmm. And before we take a look at a couple more ETFs to see what themes and sectors were of interest, how do you just want to tie a bow on the indexes themselves? I mean, we've primarily with the NASDAQ and the S &P 500 because we've been talking about how we are on the verge of a power trend. We had a follow through day in early August, the 4th to be exact. Interesting. 4.8 and 8.4. Right.

7:31Alissa Coram:Yes. The follow through day. Calendromes.

7:34Justin Nielsen:All right. But anyway.

7:36Alissa Coram:And interestingly, also, both of them, the NASDAQ, I think, had lower volume, but higher dollar volume, lower trading volume, but higher dollar volume in both of those cases. Exactly.

7:48Justin Nielsen:Interesting for what it's worth. And then if you take a look at the S &P 500, you know, we just need an up day at this point, really, to get that power trend in effect. So less powerful of a start than that April timeframe. But what are your thoughts on the pending power trend?

8:14Alissa Coram:Yeah, and there's a reason why we do kind of postpone that until we get an update. There have been some cases where a power trend never happens because by the time you get all of those factors, And remember, we're looking at 10 days where the low remains above the 21 day moving average line. We're looking for at least five days where the 21 remains above the 50 day moving average line. And, you know, a few other things, the up day and also the 50 day moving average line and uptrend. But that up day, sometimes you won't see it happen and a power trend doesn't doesn't occur because it's just on the verge.

8:50Alissa Coram:And by the time you finally get your up day, maybe you've already crossed back below your 21 day moving average line. And so it kind of just pushes it out further. You need another 10 days and sometimes it never happens. So it does, you know, try to keep you out of trouble again if there's weakness. But yeah, the biggest thing is very big contrast to April, right? We kind of had our follow through day and it was boom off to the races. This time we had our follow through day. It was a nice constructive, I would say, consolidation here. A nice breakout. I really liked Thursday's action. That really had me leaning a lot more bullish.

9:30Alissa Coram:I would have preferred for us to move from there. And now we're kind of coming back into that little consolidation area, which, again, it's not it's not doing anything disastrous. It's just not as much fun when the market indexes aren't going up as quickly. And I'm seeing that in my own portfolio. There is a lot of stocks that I'm buying and I start getting a little nervous and they're not moving. And so I end up kind of taking the positions off. They might come back. Some of these, like with Amphenol that we'll speak about in a little bit, I'm buying back when they look better. Sometimes it's just, oh, it's going through a handle and now it looks a little bit more interesting.

10:12Alissa Coram:But I still haven't gotten the traction that I really want to see. And I really like when the market rewards me immediately for my decisions, you know, where it's kind of giving me a treat, saying good boy and patting me on the head. And I'm just not getting that right now.

10:29Justin Nielsen:Yeah. And obviously, we love Power Trends because if you look even just the last couple of years, it's clearly the best time to be making money. Right, Justin? We have the wind at our backs. And, you know, my fear is that we could be in this the situation that we were in the late 90s where you have that uptrend. But it's a choppy ride. Right. So I'm mentally preparing myself, even though we are on the cusp of a power trend. And I'll, you know, lean more aggressive if we do see that. I, you know, and I already have quite a bit of exposure. So it's not like I'm being cautious here. But I'm preparing myself for the alternate scenario or one of many alternate scenarios.

11:14Justin Nielsen:And that is we'll be lucky if we can just cleanly hold above the 21 day or even the 50 day for some sort of time frame. And we'll have to see what the leadership underneath the surface looks like if that does happen.

11:32Alissa Coram:And Allie, I think that's the exact way to approach it. You have to have multiple scenarios in your mind. And at the end of the day, you're going to let the market kind of decide. And as long as you're not surprised, like, oh, wait, I only expected this one thing to happen. And when that doesn't happen, you don't know what to do. You've got multiple scenarios. And so you've got a lot of if then statements. OK, if this happens, then I'm going to do this. But if this happens, then I'm going to do this. And let's also be clear. Not all power trends are created equal. some are much much stronger again they come out right out of the gate give you cushion those are the ones that are a little bit easier other ones um look you know 2022 there were a number of technically power trends that started but you were below the 20 uh the 200 day moving average line and by the by the time the power trend started that's exactly when you were rolling over now again we're not in that same position where we're below the 200 day moving yeah below declining 200 Yes, exactly.

12:33Alissa Coram:But it's worth just mentioning that sometimes, you know, these power trends, they don't get the traction. And so you really kind of have to have a few things in place. The power trend, the follow through day, stocks moving, leaders going, and your portfolio making progress.

12:52Justin Nielsen:All right. Well, we'll take it one day at a time. Back to a look at what was going on underneath the surface today. Mentioned at the top of the show, rising oil prices. So here's a look at USO up almost 3 % on the day amid more headlines with those continuing Mideast tensions. Let's take a look at XLE, the energy sector continuing to look pretty great here, Justin. Yeah.

13:21Alissa Coram:And so, again, this is something that we've been talking about. A lot of times it's a little harder to play some of these commodities, especially when you've got headlines. But it certainly seems like the market is getting a little bit used to, yeah, oil is probably not going down anytime soon. Um, you know, it's, it's, it's something that we're going to have to get used to. And look, that's not to say that if things get resolved, um, you know, that you're not going to come down fairly quickly, but you, you could just come down for a day and maybe, you know, we have to get used to some higher, higher prices here.

13:56Alissa Coram:Um, but a lot of these, a lot of these individual stocks and a lot of the sectors that are related to this have been outperforming. And it's just one of those things that because we're so focused on strength, we can't just ignore when the charts look good on something. And XLE certainly looks very good. And look, you can take your pick of a lot of these different groups and a lot of these different ETFs. XOP, the Explorers and Producers. You know, that's also been very strong. You've got CRAK. This is my foray into it with the refiners. And you also have some of the field services, OIH, for instance.

14:41Alissa Coram:So it's kind of, you know, a lot of the different levels, the upstream, the midstream, the field services, you know, they're all kind of working and rowing together.

14:50Justin Nielsen:Yeah, another area that we have been looking at lately, the shipping. Look at this breakout in boat.

15:00Alissa Coram:Yeah, exactly. It's one of those things where not only do you have the commodity-related stocks themselves, but hey, you got to move this stuff around and transport it. And so this is less about the dry shipping, which has had its moments as well, but this is really about shipping your oil. And that's a big thing right now, especially with what's going on in the Strait of Hormuz and possible supply disruptions. So this is a big thing right now.

15:28Justin Nielsen:It sure is. Let's also take a look at the gold miners deserving a mention. GDX. I know you and Dave Keller talked about gold on the podcast last week and holding up great after that big burst two weeks ago.

15:47Alissa Coram:Yeah, I couldn't help myself. I did a little bit of a purchase. In addition to oil, again, there's a lot of concerns about inflation. So a lot of times gold does act as that inflation hedge. This got above the 200-day moving average line, and that's kind of the first stop, right? It was in a little bit of a no-man's land between the 250-day. But now that we're above the 200 and we had one final kind of test, I shouldn't say final, that remains to be seen in this market. But we did have another test of the 200-day moving average line. It was successful and we're getting a bounce from that. So, you know, again, a lot of times with the commodities, yes, there are individual stocks that look interesting, but sometimes it's like, oh, well, I don't know who the leader is.

16:30Alissa Coram:And they're all kind of going together because of the commodity price itself. In this case, you could look at GLD to see the underlying, you know, what's happening with the spot price of gold. But, yeah, I went with the ETF myself. And, yeah, that's working out so far. But certainly one of the things to keep an eye on. And look, for as much as we saw kind of tech outperforming a little bit and the markets coming in a little bit, the movement wasn't to some of these traditionally defensive areas. XLP, the staples. Yeah, that wasn't up today. You know, that was down considerably coming back down to its 50-day moving average line.

17:10Alissa Coram:And insurance, that's been an area that we've been watching because it's been holding out better. And it was certainly doing really well in July when the markets were coming in. And this did not have a great day. So this has been a little bit tricky. And then also some of the areas that we were looking at that looked like they were ready to go and then they were pulling back. Well, they look like they're ready to go again. Here's XBI, the biotech space, having a great day today, closing at the top of its range. And we'll also be talking about a biotech stock today.

17:44Justin Nielsen:We sure will. But now let's turn our attention to a chip name on our radar, CyTime. It's gotten a good amount of play, I would say, on this show after the earnings report showing another quarter of triple digit bottom line growth and this quarter an acceleration to triple digit top line growth as well. Today, the stock up over 5 % and arguably actionable.

18:13Alissa Coram:Yes, and again, it's been actionable for I would say the last few days. I think Friday was a good buy right there. But here again, we had that strong earnings move, as you said, that got us through the 50-day moving average line. That was kind of step one. The pullback remained above the 50-day moving average line. that step two and now we're seeing progress, you know, from there. So in addition to that, I really like the relative strength. If you compare this to SMH, again, you're getting kind of a top-notch mover in that space, in the chip space. Whereas this is just getting above its 50 day moving average line and didn't have a great close today, a very different look on Sightime today.