Nasdaq, Leaders Hit Amid Chip Sell-Off: Argenx, eBay, TTM Tech In Focus

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0:39Ken Shreve:good afternoon everyone and welcome to stock market today for thursday july 2nd it's alissa quorum here and a lot of the leading ai names especially in the chip sector got hit hard today joining me now to take a look at the action in more detail is my colleague ken shreve ken what What do you have for us today? Well, just wow. I'm looking at an all-time high for the Dow Jones today. A nice 1 % gain, seeing a flat performance for the S &P 500. But I'm seeing the Philadelphia Semiconductor Index down 5%, no, 5.4 % decline for the Philadelphia Semiconductor Index today, Ali. Quite a wild day for the stock market.

1:23But a less than 1 % decline for the NASDAQ composite. Pretty impressive, but a lot of damage out there. But let's take a look at a biotech stock, Argenics, because healthcare and biotech performed pretty well today. Also want to revisit eBay because there were buyers in eBay stock again. And then we did get a sell signal. Those contract manufacturers, they were under pressure yesterday, big time, and they were under pressure again today, along with broad-based selling in the semiconductor stock. So TTMI, we'll take a look at TTM technologies.

2:03Ken Shreve:Okay, sounds like a plan. We'll do that first. Let's take a closer look at the major indexes and some key ETFs that explain what went down today. Here's the NASDAQ composite, a hit of about eight-tenths of a percent. It did close off lows on the day, though. Below that key 50-day moving average we've been keeping an eye on, you mentioned the S &P action flat on the day. A little bit of a roller coaster here intraday. Some buyers coming in at the close. So we like to see that. The Dow, you talked about all the big moves yesterday underneath the serpent. That pretty much canceled out. Well, today we did get a move to the upside here for blue chips the Dow up one percent let's also check out the Russell 2000 down about nine tenths of a percent but that uptrend still intact here Ken nicely above that 21 day line RSP so the equal weighted S &P hitting a high here so a lot of cross currents in the current market can start with the NASDAQ a lot of investors out there trading in the IBT growth style paying a lot of attention to this tech heavy index.

3:20Yeah. Yeah. And I mean, gosh, you know, where to begin? I mean, we lifted off lows during the final few minutes of trading or maybe during the final half hour of trading. So that was, yeah, I mean, we saw some buyers come in late. So that's a good sign. So we can look at the glass as half full. You know, why not? We did close underneath the 50-day moving average. We closed below really all of the moving averages here to end the week on a downer. It was kind of a disappointing way to end the week after we kind of made that nice move earlier in the week above the moving averages. And again, I mentioned the SOX, the Philadelphia Semiconductor Index.

4:11That was some pretty violent selling. I think SOX will bring it up. Yeah, so this is where all the selling was in the market. I saw a headline on CNBC just a few minutes ago. They said it was Tesla and Meta that fueled the selling in the NASDAQ today. They had bad days as well, but it was really the chip stocks that drove the selling. But you can see the SOX closed just above the 50-day moving average. SMH, which we talk a lot about, the VanEck Semiconductor Index, showed a loss pretty much in line with – didn't fall as much as the SOX, but same type of situation closed just above. Here I was thinking we may get a break of the 21-day line for the SMH today.

5:01But once it broke the 21-day line, boy, that selling really accelerated and, yeah, saw a lot of damage. Now, did we see a lot of leading semiconductor stocks come down to their 50-day lines? No, but we saw quite a few break their 21-day lines today. So probably saw some, you know, some profit-taking, at least partial profit-taking signals for people that had some, you know, some big gains in some of the big leading semiconductor stocks. So anyway, you know, back to the NASDAQ, you know, we, again, disappointing to see it close below the 50-day moving average. But, you know, and we did have volume pick up the pace a little bit from yesterday.

5:46But I would have to say this is a positive as well because, you know, we are, you know, headed into a three-day weekend. The market is going to be closed tomorrow. So we had light, you know, pre-holiday volume today. You can see volume was – it is going to be what we're going to call it a mild distribution day because volume picked up the pace from Wednesday. So the fact that it was higher than the prior session, it is going to be a distribution day. But we didn't get a big, huge pickup in trading volume. So it wasn't a, you know, kind of a massive distribution day today. But, yeah, I mean, it's a little disconcerting to see the leaders come off as hard as they did today.

6:34But, I mean, we can take a look at a couple of leaders, maybe like an MRVL and an MXL, some of the big chip leaders, and see what they ended up looking like today. So, you know, MRVL, I mean, this was, you know, did you get an unequivocal sell signal with a decisive break of the 50-day moving average? You did not. But, you know, a stock that had been respecting that 21-day moving average during its uptrend, you know, after the initial breakout, you know, it did break that pretty convincingly today. And volume, you know, wasn't huge, but it picked up the pace again from yesterday. And it was the heaviest for a down day and, you know, for, you know, at least a few, three or four weeks.

7:26So in max linear, the same situation.

7:32Ken Shreve:17 % decline today. These are big, big percentage declines. And, you know, when you see percentage declines like this, this is, you know, typically it's going to just take some time for stocks to recover from drops like this. It's, you know, typically when a stock falls 17 % in one day, it's not, you know, just a one-day recovery back. You know, it usually takes a little bit of recovery time. So we'll see how these two stocks recover. Obviously, the chip stocks have been the big, big leaders during this bull market uptrend. So, you know, everybody was waiting for the pullbacks. Many were really, really super, super extended from their moving averages.

8:23So I think people were probably smart to take at least some partial profits today. And maybe some people have been taking some gains, playing it safe a little bit, you know, before today. Maybe others hadn't. That's fine, too. But, you know, I think you got some messages from the market today just with the sharp percentage declines. And, you know, but I would say, you know, even though the selling was focused in the NASDAQ today, when you look at the S &P 500 and the breadth on the NASDAQ, again, you know, it was less than two to one negative the whole day. So even though there was this really harsh selling in a lot of AI stocks, and it was AI stocks, too.

9:11It wasn't just chip stocks. There was a lot of selling in the AI infrastructure space as well. Your fiber optic stocks, look at Lumentum. So your fiber optics and AI adjacent stocks were under heavy selling pressure as well. But your industrials, health care, still did very well. So that caused the S &P 500 for a good portion of the session. Really, the selling in the S &P 500 never really got intense. And breadth actually ended positive on the S &P 500 today. And even when the S &P 500 was under selling pressure, there were still plenty of gainers, industrial companies, health care. There were plenty of stocks inside the S &P 500 that were positive today.

10:06So breadth was always pretty good on the NYSE for a good portion of the day. And even on the NASDAQ, it never got worse than 2 to 1 negative. It was less than 2 to 1 negative the whole day. So that was a positive as well on the NASDAQ.

10:26Ken Shreve:This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18+. It was. And then for the S &P here, we are holding the 21-day, the green line. So we do like seeing that. and we're still holding the 50-day in that 7 ,400 level.

11:03Ken Shreve:So in a little bit better of a position here. And RSP equal weighted, we looked at earlier, that also looks particularly strong here. Small caps down on the day, but the uptrend still holding here. Maybe we do get a test of that 21-day line. We'll have to see. But yeah, that's a look at the indexes today. Yeah, I think for growth investors, I think the main takeaway for today is that you have to be, you have to just be a little more concerned after today's price action about what the leaders are doing. Because we're always, when we're assessing market health, we're always looking at the action of the price and volume action in the indexes.

11:49We're weighing distribution days. You know, we're looking at price and volume and what the indexes are doing. But we're always looking at that alongside what are the leaders doing, you know, and what are the leading stocks doing? Are they holding support? Are they behaving right? Are they showing strength and support? Are they holding up well? And, you know, so you got your memory and storage stocks, your microns, your sand disks, you know, again, holding above their 50-day lines. But, you know, selling pressure starting to build in these names. Again, giving up their 21-day lines. I know that was a line in the sand, you know, for you as a longtime holder of Sandisk and for a lot of other people that have been holding these, you know, memory and storage stocks.

12:35So I think, again, for growth investors, you need to be a little more concerned about how the leaders are acting now. And maybe you don't need to be raising a whole ton of cash right now, but you should probably be taking a little money off the table right now and playing a little bit of defense and taking some profits in your winners. And that's probably a good course of action. Yeah, totally agree, Ken.

13:03Ken Shreve:I mean, we've seen some fantastic moves here, and I definitely trimmed my SanDisk back today. I feel like even before today, let's see if I can go to the daily, go back a day, see if it'll let me put this up on the weekly. We'll see. Yeah, I feel like even headed into today, it looked like this stock needs to base out, you know? So I think that the run could continue after a base. And let's see if it holds the 10-week now. But to your point, I think trimming back, especially just given the severity of the decline, right, and the character change, this was a huge drop below the 21-day line. So best case scenario, we do get support at that 50-day, that 10-week, get some sort of bounce.

13:54Ken Shreve:But a base makes a lot of sense here. Yeah. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. Yeah, I totally, totally agree.

14:32And but, you know, it's it was pretty, pretty incredible to see some of the some of the movers. You had some very, very bullish price action, again, not only among several S &P 500 components, but again, here's your XLV, your healthcare ETFs. Now, the healthcare stocks have been outperforming for a while, but they did very well today. Not just biotech stocks, but healthcare stocks. Just look at J &J, Johnson & Johnson in the Dow Jones today. Beautiful breakout for Johnson & Johnson. So this was really just an extension of a prior breakout from a couple of weeks ago. But this one, you know, went over the 250 or 260 level today.

15:16You had Amgen and Merck both in the Dow showing great relative strength. So these are just examples of, you know, money flowing into the health care stocks in the Dow Jones today. So, and look at the move that Apple, Apple was actually, I think, the best percentage gainer in the Dow Jones today. Look at that percentage gain from Apple today. Interesting. Moving strongly above the 300 level today. So, lots of, yeah, lots of large cap, you know, industrial and Apple. I'm not sure what moved Apple today because Meta and Tesla were both down sharply today. But yeah, lots of movers and again, lots of big movers in the S &P 500 as well.

16:05Ken Shreve:Interesting. I wonder if Apple, in some respects, is perceived as a flight to safety that's still in tech. Yeah, absolutely. I think that's very possible. So, you know, if you're looking at it through that lens, we'll see. Kind of a steady earnings grower, too, because if you look at Apple's results, you know, they don't have, you know, too many earnings hiccups. You know, a very steady, steady earnings grower. Yep. And there's a look at the weekly chart there. Okay. We also just very quickly want to take a look at KRE. This is the regional banking ETF. Ken, thoughts on this? I'd had a pretty good week.

16:44Well, I wanted to look at KRE alongside XLF because XLF finally got moving today. XLF had a very nice move, you know, broke out, finally broke out yesterday, topped a buy point, and it extended gains today. It was up another 1.5 % or so. And then you look at the regional banking ETF, KRE, which we have on leaderboard, and it's been a nice winner for us. That had a nice move yesterday, but it actually reversed lower today. So those two ETFs were kind of moved in opposite directions today. Again, not sure why there. I know XLF has got your big money centers as top holdings like, you know, J.P. Morgan and Goldman Sachs and XLF.

17:31So maybe some of the regional banks might have been, you know, under some pressure today, but they have been performing, you know, performing quite well.

17:39Ken Shreve:All right. And then you mentioned the impact on growth investors. Here's a look at the FFTY cap force, IBD50 ETF, down about 4 % on the day coming down to the 50-day line. So for a lot of traders who trade in the IEBD style, maybe this is what your portfolio felt like a little bit today, perhaps. Yeah, yeah. I think, again, growth stocks were definitely under some pressure today. So it did stop right at the 50-day moving average. You see, last time the FFTY tested its 50-day line, it went all the way down to 37 and found support. it. So it did close off lows a little bit today with the NASDAQ.

18:22Still took a hit down about 4 % in volume, picked up the pace, but it did stop right at the 50-day moving average. This one's shown a lot of relative strength lately since it did get that name change. It does, I do like the name change. It does convey a lot of strength, that cap force IBD50. So, you know, we'll see. It's been performing well lately. We'll see if support see if support holds here. But this is, you know, heavily weighted in a lot of chip stocks. It does have some health care and biotech in there, too. So we'll see if support holds here at the 50-day.

18:58Ken Shreve:Okay, let's take a look at ARGX, Ken, in focus today with this breakout of 3.3 percent, a profitable biotech. So definitely one that we want to take a closer look at. Yeah, you've probably seen their national ad campaign. See Monica Ocellus, a former tennis professional. She's a spokesman for Argenix, a spokesperson, I should say, for Argenix. Their flagship drug, Treats Myasthenia Gravis, which is kind of a neuromuscular disorder. And she suffers from it, but that's their flagship drug, Treats Myasthenia Gravis. And a very profitable company here. You can see big annual earnings estimates and great top-line growth as well.

19:52Relative strength rating of 78 because, you know, it's kind of forming this big, long sideways base here. But, you know, it's got a good composite rating, a great DPS growth rate, very profitable company here. So we have this in our newly aligned industry groups. This is in the profitable biotech group because they generate a lot of profits. And look at the top line growth in recent quarters here. They've really been generating a lot of revenue. And I like the breakout here. The relative strength line along with the relative strength rating is still a little bit off highs, but this one could be ready to get going here.

20:33High-priced stock, but I like the look of the breakout here. So this is another biotech performing well and topped a buy point today and is still in the 5 % buy zone. And we've been familiar with this company for a long time because it's been profitable for a long time. It's been kind of in and out of our growth screens. And because it's, you know, showing renewed relative strength and the relative strength rating is improved, you know, starting to appear back in our screens again. I think that, yeah, the composite rating is 80, 87, I believe. So, yeah, it's looking pretty good here. Argenix, A-R-G-X.

21:15Ken Shreve:Mm-hmm. And I just want to quickly point out that I like how the weekly chart really smooths things out. You know, it's always important to take a look at that weekly chart because you do have a little bit more volatility on the daily. You can see that outside day, downside reversal. Wonder if that was news related, Ken. But the stock did bounce back pretty quickly here. So it is now above the high of that day. So that's good to see. Yeah, I'm not sure what – that was a pretty volatile down day there, and that could have been – I'm not sure what news that was, but it did recover and it did break out today.

21:57But we should probably check and see what caused that downside reversal. But good breakout today. And I see the accumulation distribution rating is still at A. So, you know, whatever fueled that downside reversal, the stock has been able to overcome it here.

22:14Ken Shreve:It sure has. Okay, let's go over to eBay. Look at this base formation and starting to get a little momentum here. Ken on the right side shares at 3.2%. What do you think? I feel like we've been talking about eBay more and more lately. I know. Yeah, I brought it up a couple of weeks ago. And, you know, I first talked about it because Ryan Cohen, remember he initially approached eBay. He's the CEO of GameStop. And he approached eBay and wanted to buy them for close to$60 billion. and eBay kind of dissed him and said the offer wasn't credible nor serious. But then he turned around and he told his board that he said, you know, that huge pay package you offered me,$35 billion, it was performance-laden and incentive-laden.

23:13And he gave it back to the GameStop board and said, I don't want it. I want to focus on pursuing this eBay deal. So apparently he's still intent on acquiring eBay. And we'll see what comes of it. Apparently he thinks there's a lot of synergies. So he's not done yet. We'll see what happens. But anyway, I brought eBay to stock market today a few weeks ago when it was kind of coming down and testing the 50-day moving average. Now it is starting to kind of round out the right side of a base here. And I still think it looks interesting. And this is kind of another, maybe a safety net in this market because eBay is another, you look at that earnings stability rank of four.

24:03Yeah, right there in that top left, the earnings stability rank of four. And that's on a scale of one to 99 with one being the best. So stocks with low ranks are good here. So eBay has a great long-term record of stable earnings, and we like to see that. And yeah, I think this is a good one to follow, especially as it works its way higher back towards that 120 level and just a stable track record of earnings. They have a huge collectibles business. Obviously, they still have their online listings, but very, very strong collectibles business, and business is booming there. And we'll see. Something could come of this GameStop story, but like the base that's setting up here, and we'll see if it can get going.

24:57Ken Shreve:Sounds like a plan. Let's round things out with a look at TTMI. This is TTM technology, so a great example of a sell rule that was triggered today. The stock down 13 % slicing below that 50-day line for the first time since, you know, that late March, early April timeframe. It had gone on a really great run, Ken, over the last couple of months. But this sell signal, pretty clear here today. Yeah, this is the exception in the market. It's certainly not the rule. I mean, we've seen isolated instances of, you know, leaders going through their 50 days. It just hasn't been happening much. But TTM is, I consider TTM a big leader in the contract manufacturing group.

25:49The fundamentals here are outstanding. They're really known in this group for their next generation circuit boards that they supply a lot to the defense aerospace and defense stocks. But yeah, decisive break of the 50-day moving average. Now, I will say volume did not really expand heavily to the downside. Now, we did not get a rush of institutional selling as the stock broke through the 50-day line. You can see volume was pretty much average. So even with the NASDAQ, again, this pre-holiday trading here, so we didn't see a whole lot of volume to the downside on the NASDAQ today in this mild distribution day.

26:31And even in a lot of stocks that were falling in, you know, big percentage declines today, just not a lot of heavy volume. So that's good as well. But TTM, you know, there were a few stocks in the group today. Sanmina as well, S-A-N-M, I believe, was having some problems around the 50-day moving average. But this was a bad break today. And if you start seeing more of this, this is normally going to be problematic for the broad market as well when the leaders start to roll over. But again, we're just not seeing a whole lot of this right now. I think it is problematic when leaders start to break their 21-day lines.

27:11We're seeing more of that because that ultimately brings tests of the 50-day line into play. But, you know, the good news is that we're not seeing, you know, multiple breaks of the 50-day lines at this point in a pre-holiday week. So volume was light. So I think the market is still, you know, we're not doomed yet. We're seeing plenty of yellow flags out there. and the action in the leaders is starting to become more of a concern. But we're just in a volatile – we're just in volatile times right now. So we have to still be open to different scenarios, but we have to recognize signs of weakness when we see them and just kind of listen to the market's message every day.

27:59And, you know, today wasn't a great day, but we try to glean positives where we can. But, you know, in the contract manufacturing group, this is the one group that really looks to be in trouble. I will say Flex. We've got to tip our hat to Flex, F-L-E-X. Well, that one is barely holding. I thought that one was still holding a little above support. But that one, yeah, that one is on the ropes.