Markets Up As Trump Shifts Tariff Strategy; Sandisk, ASML, Woodward In Focus

23:48Mike Webster:KRE, the regional banks, that was up over one and a quarter percent. Nice kind of support right there at 70, this former line of resistance. Got support here and then again today. So that's a nice move over a percent there. And XLC, one of the mega caps that was really helping the NASDAQ today was Alphabet. That was up over 4%, just over 4%. So XLC, one of the components in there is Alphabet, one of the big components, along with Meta. So yeah, the big move in Google, certainly helping that out. And then rounding out, again, our top spots, the transports, IYT. This was up over 1.6%, almost 1.7%.

24:34Mike Webster:And a few of the areas that were the top dogs, GDX, gold coming back. This is the gold miners, GLD, the gold trust doing very well, almost up 2%. And SLV was also up significantly. This was up almost 8%. But again, there's already been a lot of damage here. So you have to be very careful. 8 % moves and this is an 8 % move today and this is still down 30 % off its high so that's kind of typical of what happens after a big move up that goes parabolic and climactic it can come down fairly steeply and have a lot of volatility afterwards. Any kind of notes on the sectors and what that looks like to you?

25:20Mike Webster:Again, doesn't really seem like there's a lot of destruction of money getting pulled out of these areas that it rotated into. So what are your thoughts there?

25:33Justin Nielsen:Yeah, it's been such a frustrating market for maybe four or five months now with this constant rotation. I think I sent you a note or I meant to send you a note the other day to say, you know, we to for us, as soon as we get a chance to breathe with the projects we're working on to to look into this rotation, to try to get it on in on the first day, because we tend to get, you know, one or two days too late, which is fine in a normal rotation. rotation, but in this rotation cycle where it seems like they're like three days long before they roll over, you really want to try to get in on the first day.

26:14Justin Nielsen:I know it sounds obvious, but lots of times in normal markets, if you get in on the first day, you have more whipsaw. So you kind of need to figure out where to make some adjustments. But with that said, today felt healthier because you didn't have things. What was the worst one on there again? What was the worst ETF that you had?

26:35Mike Webster:For the day, that was XBI.

26:39Justin Nielsen:Yeah. And so let's go there. Because we were trying this yesterday for that very reason, because it looked like it was the first day of a move. And normally, I would have wanted a little bit more evidence, but tried it yesterday. But then today, it wasn't working out. and so backed away from it because you don't know how much longer it can just chop long here. It broke an expectation. Now, it's not a broken chart. It just broke an expectation the way it was acting yesterday. And I think that's probably because you had that one stock, what was it, Grail or something that was like blew apart. That's why I like doing ETFs instead of individual stocks in this space because you couldn't have seen that coming.

27:21Justin Nielsen:Some folks that we both know from way back when would have said it's in the chart it's not in the chart there was no way to see that that was we're talking about bill he was i was it was in there but he didn't know that it was going to blow apart like that so if someone got hit with that i'm very sorry you know that that's been there done that's not fun so that's why in the in that space i prefer going with something like a in xbi or or or similar an xlv or something like that so let's let's go back to the XBI that with that being your worst one, it wasn't like this major rotation where before, like what we've been seeing is like when they're rotating out of stuff, I mean, it's just getting killed.

28:05Justin Nielsen:Like go to jets, which was one that we had been trading and it looked really good. And then look at how brutal that came down. But again, it's not a broken chart. It actually looks fine. It looks like it's getting support at the 50 day. But if you're swing trading that, that's a really difficult thing to be able to sit through. And that's what we've been dealing with since October. So with all that said, I thought it was very interesting as you were going through those ETFs of how there wasn't anything that was really destroyed that I saw. And let's go to silver because I did buy this back today.

28:42Justin Nielsen:This is not where I normally buy things back. and the because typically when you get after a climax you don't want to touch that thing like you just don't want to touch it like period like for years like that's a normal thing i think that that that bad break on there was magnified because of market mechanics and that doesn't mean that's not an excuse it still fell down that much but that being magnified that much by market mechanics that mean in the futures market them changing the requirements, the margin requirements, and then that causes people to have to reduce even if they don't want to. So normally with a break like that, this thing should have been down closer to 50 than 76, given that.

29:33Justin Nielsen:And so why I went into this one, let's look at gold, because we put gold on... on, um, uh, do you want a GLD? GLD. Yeah. Yeah. Um, we put that on, on, well, we went with the UGL, the double of it, but let's just look at GLD. Um, or we went with UG. I don't know what I'm sorry. Okay. Yeah. So with this one, um, it looks set up like this is a pseudo setup day. Typically with the setup day, the spread would be a little bit smaller. But with a setup day, you've got a tiny spread closing at your highs right at an area of resistance, which gives you an expectation the next day it should move up. Now, it doesn't mean it will, but then that gives you that clear expectation.

30:18Justin Nielsen:So that's why you would want to buy it now versus waiting for Monday. But we don't know what Monday is going to bring with all this news flowing around. And really, over the weekend, people getting a chance to interpret the tariff news and they could interpret it in a way that we don't want them to. We don't know. But this looks set up and they tend to go together. It'd be very, at least lately, it would be very unusual for gold to rip and silver to fall. Doesn't mean it can't happen. So that's why I went with that. And why I think it's important, let's go back to silver. This was kind of the new short term kind of Bitcoin-ish type of thing, where hot money was going into it because it was moving so quickly and people that normally would never trade silver like myself in there trading it um and i think that's kind of the animal spirits and it's just another positive for the market so i liked this action it's sloppy i don't think people should follow me in on this trade because i think post climax top uh which that was that uh the danger is massive, like massive.

31:27Justin Nielsen:Like if you get a bad day, like we had off of that top, luckily I'd sold the day before, but part of that was luck because I didn't know that news was going to come out. And frankly, I wouldn't have been shocked if it would have gone on another run from there. So it wasn't like I was, it was, I was just using my technical analysis to get out there because it was stalling there on the day at 109.83. So how much was it down the next day? It was over 15%, I think. Yeah, yeah. So if something was down 30 % in a day, you have to assume it can go down 30 % in another day. And I know that's hard to believe, but it really could.

32:14Justin Nielsen:So if you're trading something like this, you've got to be very careful and have stops in place. But to me, this would be positive for the market if this can catch a bid and make its way back up to the 100 plus area. We will see. It's just a trade at this point, not a statement. But it's just a way of just kind of looking at the overall market that things feel like they've kind of settled down a little bit in that wanting to go back up. Even let's pull up IBIT. I would never trade this down there, but I look at this for the speculative money, and this looks like it's done going down in the very short term.

32:59Justin Nielsen:I still think it has a long way to go down, or potentially has a long way to go down. Pull up the GBTC version of it, and we've talked about this before, that if it does what it's done in the past, that could go down to$14, give or take. So that's a long way down. But in the very short term, let's go to the daily on this one.

33:25Justin Nielsen:This looks like a bounce up to$60 or maybe even up to the red line, which is your 50-day, would be normal and natural. And you see how that happened the last time it got up to the 50-day, went up to$76.50 and then rolled. on something that's on its way down, that is normal and natural to happen. And if it does that move up there or even part of that, just the animal spirits will help lift other things or should. So we will see because maybe I buried the lead on there. I think a lot of the whipsaws that we've had in the market recently is that so many people have a lot of money tied up in crypto.

34:09Justin Nielsen:And when that's selling off and they don't want to sell because that's kind of the mentality of that group of folks is just hold it even when they go down a ton. I'm not saying that that's good or bad. It's just not for me that then they just don't have that buying power. But also they don't have that risk appetite because they're getting killed in their crypto stuff. I mean, we had Jim Ropal on IBD Live this morning and he's been in crypto since it was like pennies on the dollar. So he has the ability to sit through that stuff without it really messing with him psychologically. But I don't think a lot of people have gotten in as early as he did.

34:47Justin Nielsen:And it's still not fun, right?

34:50Mike Webster:I mean, you're still losing money, but there's a big difference between, you know, and this was the point that I think Jim was making was if you if you bought it recently, and it's a loss for you versus, oh, this is, you know, this is a hit to your profits. You know, it's just, it's a different, it's a different hit.

35:09Justin Nielsen:Exactly. And I was just seeing in the Q &A, someone asking, was the UGL or the GLD as a hedge in case anything over the weekend? I always look at going into like a gold or a silver as or even a, you know, energy stocks or like like oil stocks or, you know, anything that would move up on negative news as far as, you know, things with Iran. And it's just an added benefit, but not the reason. The reason is the chart. And then if you have this thing, it's like, okay, well, if we get this negative news, this should move up on that to help balance out the other things would be getting killed. So, yeah.

35:54Mike Webster:Great, great analysis there and commentary. Hi, I'm Christopher Mims. And I'm Tim Higgins. We're the hosts of the Wall Street Journal's Bold Names podcast. On our show, we bring the bold name companies featured in the pages of The Wall Street Journal to life through real conversations with the people that lead them.

36:16Justin Nielsen:If you're looking for more news and insights that bring you inside the C-suite, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash bold names to subscribe now.

36:37Mike Webster:let's go ahead and move to some of our individual stocks that we were going to talk about one of the big high flyers is sandisk this has had again some would look at this and say well gosh is this is this a climax you have addressed that before and you know right now it does seem I'm going to go ahead and turn this back to standard fit before you yell at me you know it has had this huge move, but seems to be trying to hold up there. What do you think?

37:07Justin Nielsen:Yeah, so I have a position in this. It's very risky. I don't think 99 % of the folks watching should be trading something like this because the risk involved is enormous. I think even more so than the silver trade. But I'm just going to walk through why I'm trading this, but more so why I'm looking at it, because I look at this as the leading stock or certainly one of the leading stocks in this market, just by definition, if you look at large cap stocks that have had an outside move over the last 12 months, this is at the top of the list. And it's acting so well. And it's so reminds me of Qualcomm in 1999.

37:53Justin Nielsen:So let's look at the daily real quick. And I'm going to just kind of walk through, excuse me, what I'm seeing here. This is a high tide flag. This is what a high tide flag looks like. You have a, what is a high tide flag? It's a rapid advance and then holds in tight. That's the concept of it. And what, how do you interpret the concept? You have this rapid advance, meaning it was a$250,$280 stock not too long ago. Now it's a $650 stock in a blink of an eye, and yet it's not going down that much. I mean, from$725 to where it hit its low, that was a long way down. But on a relative basis to its flagpole, so just imagine just looking at a flagpole and then a flag so that run up from the$280 base up, that was your flagpole and then holding in tight is your flag.

38:51Justin Nielsen:And I've heard people say, oh, I wanted this to base out. Well, dude, look at a chart. You don't want this to base out. That's not normal and natural. If this were to base out, like a normal base, a cup or something like that, it would look so abnormal because you would have to go sideways for so much longer after that move that I'd be, I would look at that as a late stage base that I would be more wanting to short than to go long. So how something like this resolves itself is if it does break out from here, it could go a long way. But if it breaks down from here, meaning goes underneath the low from even three days ago, then you're probably going to have a little mini double bottom on here.

39:37Justin Nielsen:So a little mini double bottom would not be unusual, but a cup up here would be or flat base would be. Let's go to Qualcomm in 2000 so folks can see. So get this ingrained in your mind and we're going to do a trip down memory lane. Let's go out to December. Let's go to December 3rd of 99.

40:01Justin Nielsen:OK, so do you see how and let's go to the weekly for a second so people can get in this stock. I think Bill made more money on than any other stock in his career. Or certainly, if it wasn't more money, it was certainly up there. And go ahead and put the silly worst fit on. We're changing it. Chris Gessel and I were going to change the name to absolutely worst fit. But it wouldn't have been great. Well, look, there's an SOF. There's a source of funds. That was not a good place to use that as a source of funds. I've never seen that flag. But out of that cup with handle double bottom down there, you ran up and it's in Bill's book.

40:42Justin Nielsen:And so if you don't have Bill's book, you should get it, how to make money in stocks and study it in there. Or we've got it on the web as well in various places. But then it had its rapid advance and then had an ascending base in there before this flag. So it broke out of an ascending base, then went up and formed this high tide flag. Let's go back to the daily on there. now the thing with high type flags is they are very tricky and many of them will have a false breakout where they'll go through its pivot then come back in shake just enough to shake you out and then go again and you have to have the stomach to buy it back that's very hard for folks to do but this is how a flag would work now just advance it one day at a time and we'll go quickly because I know some of us have a concert to go to.

41:34Justin Nielsen:And I don't think it's you. So do you see that break out there? And you can just keep advancing it. This is what you want to train your eyes to see what's normal and natural. And you also want to picture what that bar would look like at the low of each day along there. Because when you look at something in hindsight, you see where it closed, but it would be great for us to put a function into the new market surge where it actually, you could have it, you know, what did it look like at the low of that day? Because then to train your eyes that way, but that low, when it went up to 400 and then backed, backed away that last time, that would have been very scary.

42:16Justin Nielsen:It doesn't look, yeah, right there. It would have been very scary at the bottom of that day, because if you understand charts, you know that that thing could have come into 200 in in the blink of an eye. So go forward just out to February so folks see what ended up happening.

42:36Justin Nielsen:That's why you trade high tide flags.

42:39Mike Webster:And I mean, really, this is a very, this is only three weeks and it goes up almost 100%. And this is the actual top on January 3rd, 2000, where again, this was when analysts were coming up with price targets of 1 ,000. This was a split. So it was$800 at its peak there, pre-split, but it happened right at the same time. And then just forwarding this to February, this was down 40 % in no time at all.

43:10Justin Nielsen:Yeah, look, from$200 to$105 in a blink of an eye. So if anyone is going to trade a high-type flag, you need to go back and study them. I go back and study Taser, which is Axon back in the 03-04 timeframe. And in fact, I did do on my Webby Rambles On, I did a full episode on this Qualcomm and I did a full episode on the Axon. So if you're going to trade them, I would go and watch those and study all high tide flags because they're a unique animal with massive, massive risk. Yes, huge upside, but more importantly, the massive risk on the downside. So you want to be very careful. So we can move on to the next stock.

43:52Mike Webster:Okay. And this is one that we've talked about a few times. It had, you know, I'm just going to go to the monthly chart real quick because this had such a phenomenal run. Again, ASML, it's a Dutch company. They make these huge machines that are essential for a lot of people to be making their chips. And they're kind of like the only ones that do it. So they can charge millions of dollars for these things. It had a pretty rough 2023, not a great 2025, but here we are at highs. Let's go to the daily chart and yeah, tell us what you see here. So I do have a position in this.

44:30Justin Nielsen:We did add it to Swing Trader. I think it's our only individual stock on there right now. We were going heavy with ETS right now, frankly, because we've been getting chopped up. I mean, it's been very, very difficult for a swing trading. And so with ETFs, you have that inherent diversification that doesn't solve the problems, but at least it makes it easier to be invested. And, you know, it just tames things. But with this, let's go to the weekly because the weekly is why we're really trading this. You had three weeks tight. Thank you. You have three weeks tight in there for a stock like this.

45:16Justin Nielsen:That's unusual because you'll see three weeks tight all the time on slower, pokier stocks. But when you see three weeks tight on something that's heat in a key sector like this, like chips, what is that telling you? It's telling you in that same spirit of the high tide flag that it's moved up. It's not a high tide flag, but it's a three weeks tight that it moved up. and it's holding ground there on the closing basis for three or more weeks in a row. And when that happens, when it moves up from there, that's where you want to give it a shot. Let's go to the daily.

45:58Justin Nielsen:And on here, it really could have been bought several times this week. The ideal time was as it found support on Tuesday at its 21 day. I just wasn't ready to put it on there yet just because of all the chop. Then on Wednesday, as it moved above that, that was kind of your ideal spot. And when I let it go, I was watching it and said, oh, just let this one go. I was expecting it to go through the 1500 without me. And then since it settled down, we went ahead and gave it a shot up here today, which is stretching a little bit, but not too far away. So still be careful with this because what do we have in front of us?

46:40Justin Nielsen:Are there any news in the chip world next week? Oh, no, nothing big. Nothing big. A little startup called NVIDIA. So people get obsessed with NVIDIA and think that it's a be all end all for the entire market. I disagree with that right now because it's been base building. So no one, if it had been running up, then that would be different. I think it's super important because of the market cap size of it. Just if this thing goes down 10 or 15 % on a market cap basis, that's going to bring the indexes down. And then you get this self-fulfilling thing that then people start selling other things. So it is super important, but I don't think it's the be-all end-all in the market right now.

47:27Justin Nielsen:It has been in the past, but I think that's been about a year or so since it has been. But this looks set up. And if it can go through the 19449, I mean, that's what you want to see is a big, beautiful company like this that makes these things that everybody wants set up and then could launch from here. And if it if it can break out from there, it could really help the market and help that that that space. but I wouldn't be super fearful of it. It's almost like if it has a great reaction, it would be really good for the market. And as long as it doesn't collapse and say, okay, this AI thing was a fad and no one wants our chips anymore.

48:10Justin Nielsen:I don't see him saying that, but we'll take it one day at a time. But I think it looks set up. And that's what you would call a setup day. We're a tight little spread, small closing at the highs, right near a resistance area. But a setup day in front of earnings doesn't really count. So you don't trade it the same way because you've got this known risk event. Context matters.

48:38Mike Webster:WWD, this is Woodward. We mentioned aerospace defense, really setting up now. There's still a number of very important earnings that are coming up, as you just mentioned, with NVIDIA and others. And as we were looking for stocks, a lot of them that we were looking for and considering did have earnings like five days or less away. But this one has already had earnings, a nice reaction, and it seems like it's just really holding the gains from that big, big jump.

49:10Justin Nielsen:Yeah, so well said. Really, we wanted to talk about something that didn't have as much risk as those last two stocks that we talked about. I own all three of them, feel more comfortable in this one because, like you said, the earnings are behind us. And let's go to the weekly. It's a slower and pokier type of stock. Those other ones, I mean, man, I mean, and this isn't like a super slow stock, but it's not. It's kind of right in between. It's like Goldilocks. It's got enough juice, but it's not that thing where that keeps you up at night. And what I like about it is the behavior it's had since not the last base, but the base before that very textbook, model book type of move, breaks out of a base, comes up, you know, finds support in and around its 10 week, and then forms a base, then breaks out, finds support in and around its 10 week, and then moves up.

50:07Justin Nielsen:This isn't three weeks tight, obviously, but it's feeling like, okay, it's up in this equilibrium area. Let's go down to the quarterly numbers for a second because I really like the green line on there. And that's showing you the acceleration visually, but also you can see the numbers there going from minus 7 to 4 to 8 to 48 to 61. That's what you'd like to see with the acceleration. And you're getting the same thing with the sales. but obviously with the numbers, it feels more cyclical than, you know, a growth stock that's growing at 20 % then all of a sudden starts accelerating. So it's not exactly perfect there, but it looks good.

50:46Justin Nielsen:Let's go to the daily. Now, obviously there's more risk in this because it's so far out of, there's no base around to buy from, but to reduce your risk is buy something after the earnings are already out and you've had some time for it to kind of settle down. And that's what's happened. So where do you know that you're wrong on this one? I would say the low right there, because that's gonna coincide with your 21 day and a recent low. So if I'm in this and that's gonna be my final line in the sand, you don't have to buy it here. But what's also nice about it is what, Justin? And think JL, think JL.

51:29I think JL.

51:31Mike Webster:JL.

51:33Justin Nielsen:Livermore number. We're right by. Oh, okay. There we go. Okay.

51:38Mike Webster:So many different things are coming in my head. Yes, of course, the century mark, which again, Jesse Livermore talked about that psychological marks and round numbers, but century marks certainly are amazing. Exactly. Very good. Well, Mike, I think it is your turn to share charts. so if you're ready I will hand the reins over to you okay yeah let's see

52:08Mike Webster:okay can you see that Justin yep I can see it oh good all right we're starting off where we

52:14Justin Nielsen:always start off with Bob we are take a step back looking at the weekly candles and if this is your first time with this series or this part of the show, what we do is we go through a number of charts. In each one, we're just looking at an isolation and trying to paint a picture in our mind of what would be normal and natural. We don't predict, we interpret, and we look at it and say, okay, what would be normal and natural for the next week or the next day, depending on what we're looking at. Since this is a weekly chart, we're thinking in terms of weeks. So what do we have here. This is a nice looking candle because we undercut last week's low.

52:55Justin Nielsen:We had a positive body and a larger body than last week with a non-existent top wick. That's exactly what you want to see before something moves higher. And so it would be very normal and natural for this to move higher and want to challenge last week's highs. That doesn't mean it's going to happen, but that's the procedure that you're going through as we look at these charts. And then we just kind of paint this mosaic. Now, this one looks even better. It looked terrible last week, but now this week you undercut, you had a big spread or a big positive body, tiny top wick, small bottom wick. That looks like it wants to move higher.

53:45Justin Nielsen:IWM, not so much, right? Because Because it's not terrible because you have a positive body. The top wick looks like it's slightly smaller than the bottom wick, but it's about the same. So it's kind of an equilibrium. And it's an inside wick. So it doesn't give you an expectation of moving higher or lower. It just gives you an expectation of moving sideways, which is okay. And then let's just look at it. Kind of like more data needed, right? Yeah. There you go. And we will look at something we haven't looked at yet. VXUS. This is the global market excluding the US. And you can see we're lagging everything, right?

54:22Justin Nielsen:This is, and I do have a position in this and we've got it on Swing Trader, but this, the rest of the world looks so much healthier than we do. We'll see if that continues to play out. Next thing we're going to do is look at the regression lines. Now, SPY is in a very tricky place. typically I would say that yesterday I would have thrown out this regression. Why do I say that? When you break down below your one standard deviation here, this green line, that if your high stays under there for a few days, it's typically when you want to throw out that regression saying this trend that was established here over these 50 days starting on November 21st and going out through February 4th, that regression, which is your white line or your line of best fit, it wants to go there if it's within that range.

55:23Justin Nielsen:That's what I call home base. But here, you're really right on the border of throwing it out. But with today's action, with that big spread getting close to that one standard deviation, I'm keeping this in there with the assumption that on Monday or Tuesday, we make it up through there and potentially through the green dash line, which is your minus 75 or 0.75 standard deviations away. And that's what I'm looking for. It doesn't mean it's going to happen. Now let's look at the NASDAQ. Well, this one is dead because it broke down below this. And over here, when it couldn't get back above it on this day, on the 11th, that's when I really just said, okay, this one is dead and we need a new trend.

56:13Justin Nielsen:So we can't use the regression analysis on this one at all. IWM is different. This is in a kind of a weird place because when you come down to this level and find support at the minus one standard deviation, the green line, typically as you move through the green dash line, you're a magnet up for home base, the white line. And that's what happened here. Notice when you came down here in January and once you got it through that green dash line, this is what normally happens. So that's another sign that this is getting weak, but it's still in trend. and I think I did the VXUS on this one. Oops, VXUS.

57:04Justin Nielsen:And this is looking really strong. The downside is if we get much stronger, we're going to be outside of the plus one standard deviation, and that's a can of worms for another day that we could talk about. Okay, next is our 50 % retracement. And this is again, something you can use on an intraday chart out to a monthly chart and everything in between. It's an art, not a science. You've got to pick levels to use. I've been using these same levels, the high from October, the low from November, and then your midpoint or your 50 % retracement is the 67028 or your gold line. So it's not a magical level.

57:47Justin Nielsen:for me, I look at it and say, are you living in the Northern Hemisphere above that line, or are you living in the Southern Hemisphere? The Southern Hemisphere in this context would be negative, Northern positive. And that's not talking about a map or anything. There's no hidden message in there, but US is the best country in the world, but I'll just say that because I think I'm allowed to say that. You're allowed to be proud of the country you're from. So am I? Especially during the Olympics. Oh, during the Olympics. Dude, man, curling. Give me a break.

58:25Mike Webster:All right. I love curling. Oh. It's, I don't know. I'm fascinated by it, the strategy.

58:31Justin Nielsen:I need to get myself like a broom and, I don't know, like a Dutch oven or something and try playing. Okay, so this has been weak, right? Because you've been all over the place. the nasa composite now at least you're getting up closer to that midpoint but still underneath it so that's a negative we really want to get up above that now let's take a look at the iwm this one i put different levels because we were so high above the the other months uh or the ones that we were using for spy and nasaq and even up here using the the low from january and the the high from january you're still in the Northern hemisphere, which is a good thing.

59:14Justin Nielsen:Now let's move on to our levels charts. We'll start off with SPY. And I haven't changed the level since last week. This is still That's what a sideways market does, right? You don't have to change levels. Yeah. Life a lot easier. And that 676 and change is still the key level. Let's take a look at the NASDAQ. And this one tried to move back up through the$22 ,916, which was a key level, which was the low from mid-January. So we want, when you go up to a level, you want to get above it and then make it your floor. So right now it's a ceiling and you want to turn that ceiling into a floor. And so we will see how that plays out.

1:00:02Justin Nielsen:And we'll just go over to IWM. All right. Same thing there. It's kind of a nothing burger. It's just going sideways. Okay. Now we'll move over to my new indicator that I talked about last week. I made a little bit of a change on this one. I will do a webby rambles on explaining this when I have the time, but this is very simple. It looks like it's complex, but it's not. We're using a bunch of moving averages up up on top and we're just using the Fibonacci sequence on there. So your yellow one is your first one. That is your three day and it uses all of them. You can just Google, you know, three, five, eight, and so on.

1:00:49Justin Nielsen:And what you want to do is see when they're stacked properly. You know, we'll go to VXUS first and then circle back to that. This is what you're - See what it's supposed

1:00:58Mike Webster:to look like, right?

1:00:59Justin Nielsen:Yeah. Yeah. This is, this is the look that you want where you're like your slowest one, your two 33 is above your one 44 and that's above an 89 and so on. You want them laid out that way. And then you want, what I added this week was your, uh, a line chart of your, your closing prices. So the green is where you're currently are. So I removed the candles from here. So this is exactly what you want to see each one above it. And so what I did, and I did this number of years back and I built an indicator that I will be releasing as soon as I get some downtime to dust it off. And I'll be calling it my Webby's Mojo trend.

1:01:44Justin Nielsen:But for right now, this is just Webby's Fib trend, or I'll find a better name. And what it is down along the bottom, It's just adding up for every time a short-term moving average is above a longer-term moving average, it gets a plus one. And if you go through all the numbers, the max it can get is 45. And so that's that green line here. And then we've got some lines in the sand. So we will look at this and kind of get a sense for what's normal and natural and what's not. I think it's obvious, but you want it really between 40 and 45. That's a great place to be. That's not where we are on SPY because you can see we're down here at 33, came all the way down to 30.

1:02:36Justin Nielsen:And that's not terrible, but it's not ideal. But let's zoom out a little bit. And you can see when you went into that bear market last year, when it came, once it broke down through really 30 or even 25, that's when, I mean, it really got ugly. So it's just a good way of looking at things. Very, very simple. I love simple indicators. There's no volume involved or any other dirty data. It's just the exponential moving averages of using the Fib sequence. So it's just, it's kind of a check to see is the market truly healthy or not. And as I went out here, you can see this is when you're going to be making the most amount of money when it's trending up there and this is a good way of uh just kind of keeping it simple and you can zoom back in and look at the rest let's see um did you go over the um you wanted

1:03:37Mike Webster:me to remind you about a line pen yes i did okay okay thank you make sure yeah so the the green is

1:03:44Justin Nielsen:the line pen that that is just the line chart of it and thank you that that right there and you can see that's starting to move back up through those moving averages. But when you tally up all of them, you only have 21 that are in the right direction, but at least it's moving up. And that's what you see over here with this 21. So we wanted to be moving in that direction. You don't have to wait until it's all the way up. Like, let's look back over here. When that market bottomed over here, you're looking at that direction of it. And when we get the mojo indicator on there, there's some things that will help with that and make it a little bit more obvious.

1:04:21Justin Nielsen:But this is the simple version of it. And you can see when you're down and out like that, and it turns, that's when you want to start pressing the gas. You don't have to wait until you're all the way up to 40 or 45.

1:04:33Mike Webster:And this kind of reminds me of the, you know, like a lot of people look at the golden cross, for instance, the 50 and the 200 day moving average line crossing above is a good signal. But we often look at that as a late signal, right? Because the follow through day gets you in so much sooner. So in the same way, I don't think you'd want to wait for, you know, this to get to 45 and then say, oh, now it's all clear. The follow through date definitely gives you an earlier entry. And then again, as you start crossing the 21, but when you start trending, that's when you know you're kind of in that better environment and you can really be pushing.

1:05:08Mike Webster:Exactly. And especially if you have those early entries, right. But if you've got in, you know, once everything looked great, that's much tougher.

1:05:15Justin Nielsen:Yeah. And so when I have the time to put the Mojo one on there, you'll see there's a fast and a slow. And so you're looking at that turn kind of like a stochastics of fast and a slow. But we'll keep that for then. And here's IWM. It's still hanging up there at 45. The VXUS, as we saw, was 45. RSP, 45, and so on. So it's just a helpful thing. And this is something anyone could just build on their own or just count. You can just visually just see you've got all these moving averages and are they stacked properly or not? This is just a good visual for it. Last one we are going to do is Allie's favorite one.

1:06:04Justin Nielsen:And Allie will be back soon on this. She's back in the office now. We're back working again. And we're happy to have her back. So this is just the 21-day exponential. And all those moving averages were exponential, by the way. So with this, you're just trying to look and see, okay, is your low above the blue line or not? And if it's not, is your high underneath it or not? And just quickly, okay, it's trading through it. That's good. But we really want the low above it. Now, this one, as we talked about earlier, our high has been stuck underneath it. So from that standpoint, it looks very weak.

1:06:48Justin Nielsen:Now, at least it's moving up towards it, but you have to be objective and look at everything in isolation. We saw some, the weekly chart looked really good, but this in isolation, just in the context of the 21 day is a negative. So when you're looking at this, you're not thinking, oh, well, it's also a pseudo follow through day. You're just saying, okay, in relationship to the 21 day. At least that's how I like to think of it. Just keeps it simpler that way. IWM is kind of mixed because, and that's why I built the WebE RSI, which we're going to talk about next, is you want that low to stay above the 21 day as it was doing over here.

1:07:26Justin Nielsen:But now it's just chopping around on it, which is not as strong of a trend for sure. So let's stop this one and I'm going to switch over to my WebE-RSI.

1:07:45Justin Nielsen:I was going to say we're doing better on time, but I guess we're not. I was trying. I didn't even talk during all those ETFs. I know. You just talked all the time. I was so proud of myself. I'm like, oh, it's an hour and seven minutes. All right. So this is just the WebE-RSI. This is just simply the measure of the low versus the 21-day express in ATRs, average true ranges. And that's what's down here. And what we don't have is we don't have a little blue mark on there because our low is not above it. So we don't have that going for us. Let's take a look at the NASDAQ. This is not what we want to see.

1:08:20Justin Nielsen:When you start seeing a wall of burnt orange on there, that means your high is stuck underneath it. That's a negative sign. And if you look back here during that bear market, that's also what happened over here. So you just got to be objective about it. We don't like this look. At least they're getting smaller because the distance that your high is versus the 21 day is getting smaller as expressed in ATRs. So it's 0.2 ATRs away, but you really want to get your low above it. And let's take a look at the IWM. and as we were talking about that one has completely gone away we don't have it's just chopping through it but let's look at the best looking one out there the vx us and you can see you've got a wall of blue um and really i mean i got up that's exactly what you want got all over three showing some power there and then it's just continued to trend our last one on here my daughter's favorite, which is the Bob Marley off high.

1:09:25Justin Nielsen:And this is just to look at the character of the stock. This is expressed in ATRs. Zero to four ATRs is green. That'll be the green area. Four to eight ATRs is yellow. Anything more than that is red. So that's just the general area that you're at. But really what you're looking for is the character of it. And so this is just measuring in ATRs how far your high has gotten off. And if it starts hitting the same level over and over again, that becomes the character of the trend. And you really want to pay attention to that. And so here, it got down to three ATRs, then again, three ATRs. This next time, a little bit less than three ATRs.

1:10:10Justin Nielsen:So that's a positive divergence that you like to see. It doesn't it's going to work out but if it were if that was getting bigger like it did over here that would be a negative sign so you you first you hit two and a half atrs then you fell down to close to four then four atrs then over four atrs that's going in the wrong direction let's take a look at nasdaq and again this was not what you want to see and that's why it's been chop city there and then we will look at IWM. And this is more constructive as it hit here around 3.3 and then just a little bit below that, but still you would have wanted to see that a little higher.

1:10:55Justin Nielsen:And our last one we will do is that VXUS and that's what you would prefer to see. And I think I did a good job wrapping that up quickly. I am impressed.

1:11:07Mike Webster:I'm impressed. I hope Ali appreciates your efforts. and maybe she'll come back.

1:11:15Justin Nielsen:I think secretly she's like, until these guys can do it in less than an hour, I'm not coming back. I've got a baby to take care of and I don't blame her one bit.

1:11:23Mike Webster:Yeah, exactly. So very good. Well, Mike, really appreciate that. Let's, you know, in danger of ruining - I'm wrapping it up. I'm done with the show right now. If you want to keep going, I will stay here. I was just going to say, so what do you think people should be doing this weekend? because I'm looking at a few people are feeling a little bit better about the market because of today, really looking to get their screen on. So any advice for weekend homework?

1:11:53Justin Nielsen:Oh, yeah, that's a good question. So what I would do, especially with today's action, you're wanting stuff that closed today with a high closing range, because that's what the market did. So if you are looking at something that by closing range, if close at the top of the range is 100, at the bottom is zero, the middle is 50. So in market surge, you can go in and do a daily closing range or a weekly closing range. So I wouldn't do the weekly closing range today because, or the weekly closing range for this week, specifically, I always do one of the screen with that, but not for this action, because it was really about today.

1:12:31Justin Nielsen:So I would look and see, oh, you're going to show?

1:12:35Mike Webster:Yeah, I'm just going to show like an example here. Okay, great. So, let me get over.

1:12:40Justin Nielsen:So, with the closing range, what I always do when I'm doing my screening, the first thing I'll do is I'll look and see the instrument that I'm concerned with. So, the instrument I'm concerned with today is the NASDAQ because of… So, let's pull up the NASDAQ for a second, and then we'll toggle back to this.

1:13:02Justin Nielsen:So, I'll look at it and say, okay, how much was it up? It was up 0.9. And what was the closing range? Or if we don't have it on the NASDAQ, go to Qs. It would be about the same. So it looks like a 95 or so. What is it?

1:13:16Mike Webster:A little bit better for the Qs, it looks like maybe. 86. Okay.

1:13:20Justin Nielsen:So with that in mind, I would still, I would do the screen for 75 closing range or higher because then, and up at least 1 % on the day. And that would be my starting place. Why? Why? Because I'm saying if it didn't do at least that, then it was lagging the market today on what could potentially be a key day. So therefore, why do I want to really be looking at it? So that's the first thing that I do. And then I would do other things, just basic things, your liquidity requirement. For Swing Trader, we use 75 million for my own trading. I'll go as low as a$25 million volume. You can go lower than that, but then you're dealing with illiquid things and you can get a little bit hurt with big spreads and all.

1:14:09Justin Nielsen:But, you know, if you feel comfortable with it, that's fine. Above$10, so above$10, above, let's call it$25 million volume, above your 50-day, above your 200-day, that was up at least 1 % with the 75 % closing range. And that would be very easy to build. look, you're building it right now. And then just to kind of wean an easy way to get rid of like ETFs and things like that. One thing you can do is just put a composite rating because we don't have composite ratings on ETFs. You can just do a composite rating of like greater than 60, which is really low. So if you can go back and do that. Oh, do all of those things?

1:14:55Justin Nielsen:Oh, I thought you did it. No, no, no.

1:14:57Mike Webster:I was just showing where they could do it.

1:14:59Justin Nielsen:Oh, okay. Got you. So it'll be a very easy screen to build, and it won't take a lot of time. If you need to, if it's too many stocks for you, then what I would do is I would raise the dollar volume, and I'd raise the composite rating. I wouldn't screen right now on relative strength, because you have so many rotations that you might miss some things because there are some things that look good with a low relative strength right now. So you got to know when to use the different ratings and when not to use them and how to use them.

1:15:33Mike Webster:We've been kind of like looking at more of the three month relative strength, just looking at XOP, for instance, a 75 relative strength rating. And that's kind of lackluster, but the three month, 88, the six month, 84. So a lot better on the short term. So that's another thing to kind of look at for some of these stocks and it's funny that you mentioned qual that we

1:15:53Justin Nielsen:talked about qualcomm today because the reason why i invented the three and the six month um rs's was because of qualcomm because it bothered me so much that after it fell and was like let's call it 50 off its high it's still having 99 relative strength i'm like this is this is worthless like what what you know so then that's why i developed that and the six month and and they're fat, they're, they're, they're more exponentially weighted. Um, but anyways, that's a topic for another day, but that's what I would screen screen on. And I would keep an open mind. We're been in chop city. We're going to remain in chop city until we're out of it.

1:16:32Justin Nielsen:And we're potentially out of it. You want to be optimistic, but you also want to be realistic. So if we end up closing below today's low, that's then today's action was totally negated. And, it could get ugly. So you got to have lines in the sand.

1:16:52Mike Webster:Absolutely. And again, as we said, while it is follow through day-ish, that's just one thing that we look for, right? We have to get above that 21 day, above that 50 day, trend above the 21 day. So you're looking for all of those things. And I'm sure we will keep you up to date on that with the stock market today video. So join us next week. Thank you so much, Webby, for all your thoughts and your homework for this time around. Enjoy your concert. And that'll wrap it up for us. We will see you all next week. And if you haven't joined us already on IBD Live, please do so. You can go to investors.com slash IBD Live for a trial of that.

1:17:28Mike Webster:You know, take a look at what we're doing during the day. And those special guests, including usually David Ryan on Tuesdays, and like we had Jim Ropal today. So some great guests to get their thoughts. We start 10 minutes before the market open and go for a full hour and a half plus a lot of times. So please join us for that and have a great weekend, everybody. Take care.

1:18:09Mike Webster:Hey, this is Telus Demos. And I'm Miriam Gottfried. We're reporters at The Wall Street Journal and the hosts of WSJ's Take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players, and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash takeontheweek to subscribe now.