Russell 2000 Soars, Caps Volatile Week; AbbVie, BrightSpring, Alphatec In Focus

27:54If you're in the Southern Hemisphere, then that's in a weaker position, and that's where we are right now. So we want to at least start living up here again, which we were for a bit. and then again you can slice out a lot of different ways let's look at that very interesting that yesterday by the way actually was higher than the october 10th high and lower than the october 10th low um you know for as wild as that spread was the fact that uh yesterday was even larger um the position was very different because again of the gain that it had you know considering the previous day, as opposed to just falling apart, you know, at the get go.

28:35But yeah, very, very interesting that it was that wide of a spread. Right? I mean, crazy. I don't know. The two of us would have to kind of go back and try to find other times where that happened. And it's, man, I think it's going to be very hard for us to find such a wild day and in a short period of time, have such an outsized day in the same space and go higher and lower. It's just like, this is like, have I seen this before? No, I mean, I cannot picture it in my head and look at a lot of charts. So this is rare. I'm not saying it's not out there. It just would be hard to, it would be hard to find.

29:14Again, what seems like more likely is those big spreads one after another, you know, back and forth, you know, Again, like what we saw kind of in April, you know, or, you know, even, yeah, in those times of, you know, higher volatility. Yeah, like down in this area. A lot of just big spreads, you know. Yeah, that's normal and natural in that position because what the market is trying to figure out where equilibrium is and it's all over the place. But what was unique about this was you had that day and then it was like, oh, the market just forgot about that day. And then it's just the very, when you see things that are unusually weak, you want to pay attention and take action on that.

30:01Unusually strong, you want to do the same thing, but it's a different type of action. So this is a warning sign. Like I always say, you know, that the animal kingdom is filled with, you know, warning signs. You see a snake that's got all sorts of weird colors on it. Probably, you know, or it's rattling. You know, it's telling you, stay away. And this is another one of those signs. So let's move over to our next one. And this is our lines. And these are all the same lines that we've been looking at, with the exception of I did put a positive green line up here on the date on the 11-12, just because once we get through that level, then that would be a positive thing.

30:42also getting above the level of yesterday's high. That's what I'm looking for. I'm not going to take anything too seriously until we can get above that on a closing basis. All this is just kind of noise. But these are still, you know, we broke through that level here, kind of bounced above it. And then you see the kind of stair-stepping down below is just, you know, key areas. And there's more lines on here. Here's the NASDAQ, same basic lines that we have on there. And this is helpful to keep the same lines on and try to not change them all the time, because that way you're like, okay, four weeks ago, I was thinking this was an important level.

31:26And oh, wow, now we're back down to that. And it just does tell you something. And you could draw another 20 lines on here if you wanted to, but we won't. So now the next one is my chart that is relatively new for this. And it's a bunch of moving averages from short-term moving averages to longer-term moving averages. I like going with Fibonacci numbers. You can go with any number that makes sense to you. So this is a 3-day, a 5-day, an 8-day, a 13-day, a 21-day, a 34-day, and so on of the Fibonacci numbers. And all I'm trying to do is say, are they stacked in the right way or not? And it's a warning sign.

32:12And it can be subtle at first, you know, up here, just slowly coming in. And that's fine. They don't always stay above. But one by one, they're starting to, your shorter term moving averages are starting to go through their longer term moving averages. And that's what happens during a base. If you were to study this on any stock forming a base, this is what happens. And it's just another sign that it's the time element that you have to wait for the timing of it. And it takes time for moving averages to get stacked back the right way and just envision that here. If we were to move up the right side, you know, you're looking at really weeks until the three days above the five day and the five days above the eight day and eight days above the 13 and so on.

32:59And that's when you know you don't have to wait for that, but that's when you know you're in a position to be able to push it again. And we all do the same thing on. You know what? I want to address a quick question or statement that came out from the YouTube comments someone was talking about. And I think this was in reference to when we were having our power trend discussion. They were asking if that, you know, if we were talking about a death cross. Not really. So the 21-day below the 50-day moving average line is much shorter term than what's typically used as a death cross being the 50-day being below the 200-day moving average line.

33:36And the reason why we like the shorter term is, you know, a lot of times by the time the death cross happens, that's when a lot of times the market turns. And same thing with the golden cross, right? The Golden Cross, yeah, it can be great for getting you in on a trend, but it's just really late a lot of times. And we'd like to try and get in a little bit earlier on those positions. Yeah, good question. All the glitters is not gold. And I will just say the two of, well, the three of us with Chuck studied the Golden Cross and the Death Cross as well as a ton of other things back when we did the Mark and School Rules in the 2011 timeframe.

34:18and it was just too late. So we dropped it out of there. But I will say I use them a lot as where you are in the market. So not as an indicator, but just kind of like these lines as, okay, what type of market are you in? Are you in a market where you're, the market that you want to trade in is the 21 day above the 50 and the 50 above the 200 day. That is, that's the sweet spot. And you're low above the 21 day. So low above the 21 day, 21 day above the 50, 50 above the 200. That simple. If you only traded during those times, I'm talking to myself, you would be much better off. Mike. And look, we're trend followers.

35:02We're trend followers. And what everything you just described means you're in a trend, right? And so it's much easier. And I would also say the downside is true, too. When you get everything kind of stacked the other way, it's really easy to stay out. You know, it's like, as you said, this is your black widow with a big red hourglass saying, hey, don't mess with me. You know, and that's easy. It's when it's kind of all this back and forth. That's where it gets a little bit tougher. The choppiness is always tougher for trend followers. Exactly. Well said. All right. So same thing on the NASDAQ.

35:37Let's look at the IWM since we looked at that earlier. And wow, same thing there. And let's look at RSP. That's your average stock. This is the S &P 500 equally weighted. And that's been chop and slop for a while. You're really. So the next one we've got is my favorite and Allie's favorite. And yes, Allie will be back next year. We are always wishing her well with her extended family now. um but the uh with this one it's just the 21 day on there nothing else and kind of like i really like this simple view and what i like to do is just focus is your high uh where's your high and where's your low in relationship to this line and it's in the wrong place your high is stuck underneath or is not stuck underneath because it was above it yesterday um moved above it just to suck you in or to increase your positions just to turn back around and close terribly.

36:38And so today, when you look at that bar, it's like, ah, or that candle, not impressive. And we didn't even get close to that 21-day. Let's look at the composite. Same thing there. Let's go ahead and look at that IWM. Yeah, you know, it's still stuck underneath there. So I'm going to stop sharing with those and we're going to go over to the other charts. Let me get there. Um, once I'm done with these charts, I can stop stressing out, Justin. Then let's just relax. Yes. Um, okay. So can you see this? Yep. Okay. So this is the spies on a daily chart and it is, um, my Webby RSI down at the bottom.

37:21And all that is, is that last chart, but visualize. So I wanted to, um, let me blow this up. This is very important. So down here, this is just your low versus your 21-day, the teal ones, in terms of ATRs. So on this day here, it's telling you that your low is 2.28, or give or take, ATRs above it. That's in a good place and in a powerful place. When it turns this burnt orange color, it means your high is underneath that. And that's what you don't want to see. And you don't want to see a wall of burnt orange like we had over here during that time frame. So what do we need to get this teal again?

38:05We need that low to get back above the 21 day. So I'll put this back down to normal so you can see when you see a wall of orange on there, it's telling you you are in a very dangerous position and you can see this increased volatility down there. But it can quickly turn. So I don't use the words oversold, overbought, because Bill O 'Neill would have shot us if either of us ever said those words. But it gives you an idea of are you at an extreme or not? And so here, this kind of tells you that this was almost four ATRs that your high was underneath your 21-day. So if we get back down to that level, it'll tell you, okay, relative to recent history, that's at an extreme level.

38:53So the fact that we're just barely, you know, we're not even at one ATR with our high underneath the 21-day is a warning sign to me saying, OK, we're starting to build, slowly build one brick at a time, another brick in this wall, you know, of orange. We don't want to see. And what ends up happening is we want it to just get some blue back shortly. But if we get more burnt orange on there, it's just more of a reason to say, hey, you know what? We could probably have a shakeout that kind of a capitulation type of low. And what I've noticed through my studies is when you have a relatively short in duration or shallow intermediate correction, you get those capitulation lows.

39:40But when the three of us were studying things from market school, you know, I just observed that when you get those really bad bear markets, like, let's say, you know, a 1929 or a 2000 or a 73-74 or an 07 or any of the really bad ones, they don't have the capitulation bottoms. They just kind of stop going down and start turning around and then you get your follow through day. So since right now we're still in a very early part of what looks like an intermediate correction, I'm expecting some sort of capitulation type of move, which what does that mean? You would see a big one of these spikes in there, and then that would tell you that you're probably closer to the end than the beginning.

40:20But if we go back in time, sometimes those spikes can get pretty big over there. But and it's something we'll talk about every Friday. So tune in. Let me go. I would also say that the gaps that you see here, you know, that is kind of, again, a little bit indicative of choppiness. And when you're not trending right, when you get that wall of blue, that's a lot of bricks to use your analogy, you know, for an uptrend. When you get that wall of, you know, burnt orange, it's a lot of bricks for your downtrend. But when you get kind of the gaps, there's just a bunch of holes in your wall. Right. So it's not a not a sound structure.

40:58It's not a sound trend. It's it's just a little bit more choppiness when you get get those those holes in your in your histogram. Exactly. And that's why I wanted to visualize it, because that's what we see. And when you're going back and forth through that 21 day, that means your high isn't below it and your low isn't above it. So you don't have a histogram. And then it's just more of a, you know, and you can see that started happening. Yeah. And that October 10th is really when everything kind of changed and you didn't have that steady, long wall like you had over here. And just think about it.

41:33That's where you make your money. If you trade at all like we do, you're going to make your money when you get a wall of blue. When you don't, that's another reason. That's why we wanted to do these charts first. It's just a warning sign. I know everyone probably got hit this week. I got hit hard that you want to not go be in that mindset of, oh, I need to make it back. You want to put the right trades on and then you'll start making it back. If you try to do this, this ketchup thing is just a recipe for really chopping yourself up. And that's what I've I just learned that the hard way over the decades.

42:11So let's go to our next one. And this is our Bob. We're Bob Marley. Bob Marley. Off high. Yes, it is Friday. So what this is, is just measuring your how far off you you are off your high. and we use the low for this and we do it in terms of ATRs. So the green zone is within four ATRs of your high. The yellow, which we are now, is four to eight. And then the red zone, that is a world of pain. And that is, you know, eight or more. So now we've dipped into the yellow. So I use this two ways, not just what color are you in, But what is it doing versus its relative past? Is it acting in character or not?

43:02So at this point on August 1st, it came down to, you know, about three and a half ATRs off its highs. So that the way I interpret this is that's about where you would expect it to bottom out in and around that, not to the penny or anything, but that would be normal and natural. So this must have been October 10th. It got a little bit worse than that, but not too much worse. So it was telling you it was still within character. Then this on the 7th was a little weird because you got a little bit worse, but it wasn't so materially worse that it was really out of character. It was kind of that gray area.

43:46But then we got back up here and we couldn't make it to fresh highs. But now we're taking another leg lower. So this is kind of the worst of all worlds instead of the best of all worlds. It's choppy and down. So it's making bigger, lower lows, but doing it in a very choppy fashion. So it's really on the risky side of things. And let's go to the NASDAQ. And that one's even worse. You can see it kind of bottomed out around here each time. And then it went lower. And then it's just inching lower and lower. And you can see what ended up happening here in March and April. It just kept on getting worse and worse and worse and worse.

44:27So you just that's what we want to guard against. And that's why we're being on the cautious side of things. So, hey, stop and share and man. Now it's all you. Now you've got to do the hard work. Right. OK, well, let's let's go ahead and turn our attention over to the sectors. And actually, you know what, before we do that, I just want to address real quickly a little bit about the where where is my. OK, here we go. Let's let's take a look at the RSP and QQEW because, you know, we have been talking about breadth and, you know, this was a little bit stronger, actually significantly stronger. I mean, SPY was up 1 % and RSP almost double.

45:14The advancers over decliners, 4 to 1 in favor of the advancers on the NYSE. And for the NASDAQ, it was maybe a little bit more like, you know, 5 to 2. So here again, QQEW up, you know, 1.6 % versus the Qs that were up, you know, 3 quarters of a percent. So is that giving you any information there? Oh, yeah, it absolutely is. Let's go back to the RRSP, for example. And that's a very good question, observation of folks. This was, I mean, a 2 % move for the RRSP is huge. Like, that's a really, really big move. So that's saying that the average stock out of 500 was up 2 % today. That tells you a lot in isolation.

46:05Then you go and you look at the chart and go, ah, looks pretty much, if you have to squint, it's still an inside day. I don't care what the numbers say, even though I have bad eyesight. So it's still, it's kind of like that IWM. It was saying, you know, it gives you a little glimmer of hope that it had this big move. I'd rather it be up 1.97 than, well, actually, I would have rather it been down 1.97 to kind of get rid of, kind of get through this corrective phase faster. I honestly think. Sounds like someone who has a lot of cash. Yeah, yeah. You only say that when you're in cash. Yeah, you know what?

46:41I want more destruction. Get everyone out. Well, you know, so look, the reality is, let's go back to spy, for example, for a second.

46:57The October 10th day, that was the beginning of what should have been a corrective phase. And I think a lot of what we've been dealing with since then is we got positive news over that weekend. And that was really what changed everything. You know, you had the government shutdown, which caused a lot of the reports that algos and discretionary people work off of. So now all of a sudden you had this. And forget the politics of the government shutdown. I'm not talking about that at all. I'm talking about how it impacts the market, that the market relies on all of these reports. And then all of a sudden you start not getting them, you know, over the, you know, over a period of time that throws people off because they don't know what to put in their spreadsheets.

47:42So their valuations of, you know, because everyone doesn't look at charts the way we look at them. Some people don't even look at charts. They just look at their spreadsheets or or they just let their computers do the work for them. So you get this one thing that's kind of out of whack. But also on that October 10th, that should have been the beginning of at least another day and a half of some severe pain. That would have been normal and natural. But then you got this news over the weekend and then you get that gap up on Monday. It was really kind of odd that it was such a tight day after that.

48:17And that's where I think things started becoming not normal or natural. And then when we went to new highs, it was like, wow, that shouldn't have happened. But you had to go with it because I was saying at that time, and I would say it again, if we were in that same situation, it felt like it could have been the October timeframe of 1999. We don't have to go there now, but that started this big trend up. And if you were waiting for the pullback or saying, oh, I just want to give it a little bit more time or some more evidence, well, then what do you do? Then you're going to have to really buy it extended.

48:48So you had to buy in there, but then, you know, you got chopped up. So I think it really all started from on the October 10th. And it was similar to, let's look at the, let's pull up the NASDAQ for a second. The Qs or the NASDAQ? No, the NASDAQ, because I don't want to have that box over there. If you look at the December of last year, that bad Fed day, I think it was like, yeah, that day. The 18th or something. That was what kind of started that corrective phase. You had this bad day. And then during that, you ended up having deep seek and all that. But that was normal and healthy. That's what you want to see.

49:25You don't want things going straight up and you don't want them going straight down either. You'd like them go back and forth. Now, you get chopped up that way, but it also that's what you build bases from. But then the news just kind of worked itself out that it broke down instead of breaking to the upside. but that day kind of was your warning flag that, okay, it's going to be difficult for a while. And it was the same thing with October 10th. But when we went into new high grounds prematurely, I think that really kind of screwed up everything. Hey, it is what it is. You just have to take the market that is given to you.

49:59So what is all this is telling me is we need time and we need to get back above the 21 day. And how far are we from the 21 day right now? Right now, we've got about 2.7 % to go. Okay. So our first thing that we want is to get a close above the 21 day. Then the next thing, that's just your, you know, your starting thing. And then you want to get your low, you want to get above it. And we were above it yesterday. And so you had to start doing some action yesterday, as you're going above it, because what else are you waiting for? It doesn't mean you go plunging, but you got to be buying some stuff there.

50:41Then it totally reverses and you got to be selling some stuff. It's just a reality. But now what we want to do is get back above the 21 day. Then the next thing is you want to get a close above the 21 day. Then you want to get the low above the 21 day and the close up on the day. then the next thing that I like to look for is for your low to be above your 21 day for three consecutive days in closing up and up in the kind of a real way. Um, like if you see this last time, if you can point to that, that when we went above the 21 day for one day, like a week and a half ago. I can. Yeah. The gap up for three days.

51:22Yeah. So we gapped above it. That was your day one. Your low was above it for a couple days, but you didn't close up on the day. Now, on the S &P, you did, but it was really a stalling day in spirit. Let's go to the S &P on that same date. And so on this, you got above it. Your low was above it. You closed up. And then on your third day, you closed above it. But it was this tiny day, and it just doesn't look that bad on this chart. But when I was looking at it on my screen, it just didn't give you a sense of power. How much were we up that day? The gap up? The third day? No, the third day. Yeah, just 0.06.

52:05Yeah, 0.06 with a 61 % closing range. So it was, yes, it was up, but 0.06 isn't really up. That's just flat. It's up on a spreadsheet, but not up in spirit. And that's how I like to look at things. You know, when that happens, whether that happens next week or three months from now or whenever, that's when I'll start getting more constructive. Again, getting above the final thing is you're low above the 21 day for three consecutive days and closing up in a real way that kind of tells you, OK, this is the potential beginning. It's not foolproof, but you can wait for five days. You can wait for eight days.

52:46You can wait for 20 days. You know, you got to pick something and study it in three days, I think, is kind of the sweet spot. And the more days you have, the more conviction you get. Yeah. Let's go ahead and go through sectors. Sure. I'll let you do that quickly because I know we're over time and I got to hit the gym, man. Yeah. I bet, as you mentioned, this has just been kind of destroyed here lately. NLR, which was our nuclear, that's come off quite a bit. Even though there was a lot of energy discussion, and again, some of these were starting to look good at the beginning of yesterday with the NVIDIA news, this just rolled over and really didn't come back at all today.

53:29I mean, it was off its lows, but still down 1.3%. Aerospace defense, another area that really didn't get much lift today. It finished down getting lower. Gold, which again was, you know, it's holding up. you know, right there at the 21-day moving average line, gapped up above it here, and it really hasn't broken down, but it just didn't really participate that much in the rebound today. It looks like it wants to shake out below the lows of this week and test the 50-day, and if it did that and had an upside reversal, I'd be all over that. Yeah. IGV, which is our software, again, there's a lot of big players in here, and Oracle, I believe, is certainly affecting this IGV, and bringing that one down.

54:16XLU, the utilities, a mixed bag here because there's a lot of the AI adjacent plays in here, but there's also the defensive. So you're getting a little bit of a mixed message there, but this is below its 50-day moving average line. SMH, that did close with a 0.3 % gain, but still well on the bottom part of this, upper part of today, but lower part of this whole range and where it's been lately. So still has a lot of work to do. Same with XLK, the technology sector, Spider Fund looking very similar to that. And again, NVIDIA being big components of both of those. So definitely, you know, having its effect there.

54:56FNGS are mega caps, kind of looking similar to those as well. you do have Google or Alpha, but I should say the parent that is just looking very different. Apple holding up well, but then you also have things like Meta. And yeah, that's just been looking pretty bad. Amazon has fallen below its 200, it's 50 day and it's getting supported its 200 day. So it's really a mixed bag there. Energy that has been coming up on our radar. It was a little surprising how ugly it got yesterday, but it was rebounding a little bit and up 0.6 % today. I will say that some of the energy stocks, pull up the XOP, which is something we traded this week.

55:39It looks really good, and there were some in there that were actually leading it, but we decided to go with that one. But it just didn't work out because nothing was working out. But I would keep an eye on this space because I think as well as the medical that things are clearly rotating into that this might have a shot. Yeah. And I mean, XLE, you know, that's been just kind of trading right around its 50 day moving average line. But you do have some members in there like FTI. This is Technip FMC and the machinery and equipment. You know, that's been trending here for the last few weeks above its 21 day moving average line looking very different.

56:16And then you had some like in the transport pipeline that looked like a, you know, solid breakout. So there's definitely, you know, XLE, you know, there's some even stronger names within these groups. And I should also mention that this was one of the areas that our podcast guest, John Kosar from Asbury Research, was talking about XLE and the energy as being a place where money was flowing towards. um queues uh you know we talked about that at length um and gdx is the next because again we're going from lowest to best for the day uh gdx um you know just just below its 50-day moving average line um would like to see a little bit more uh oomph there uh for for the recovery uh spy um this is uh you know again we've talked about this uh already just to show you where it is with this 1 % gain in the list of sectors.

57:12XLP, the fact that staples are a little bit stronger and getting up to their 50-day moving average line. Again, this is where people tend to hide, not really when they're too excited about the risk on play. Take a look at Coke, for example. Yeah, Coke. Coke had a big day. Yeah, that's not what you want to see. Walmart is actually another big component in the staples. You also have things like, you know, Colgate, Palmolive. And yeah, you know, they had big days, but, you know, some of these are just in very poor positions. So XLF, you had some kind of gains there, possible support of the 200-day moving average line.

57:55But certainly some of these some of these areas like Goldman Sachs and J.P. Morgan and the big banks, you know, fell below their 50 day moving average lines after looking pretty good just just a couple of weeks ago. Industrials were up considerably. But again, this is kind of halfway in the halfway range of yesterday's action. So still has still has work to do. And I think that's kind of the theme, right? A lot of these have work to do. Yeah, something on yesterday's action, on any index that you're looking at or anything you're looking at, I would look at yesterday's high, yesterday's low, and not take anything serious until it's trading and staying in the upper half of that.

58:36And this one being in the lower half, I don't care if it was up 1.22. At least visually, it looks like it's in the lower half. It means nothing to me through my lens. No, I agree. It just feels like it has more work to do to kind of shake off that day. And really, at the end of the day, yesterday was so negative. You really have to stack some things up on the positive side. And while this was a good start, it just it's got more more work to do. XLRE, as you mentioned, you know, the real estate sector was getting a little bit of a boost today. This was up one point three. But again, the position is a little rough here.

59:14Below is 21 day, 200 day, 50 day. But this did get above yesterday's action. It's just that it was, yeah, not as rough of a day for it. And it was in a just very different position from the leadership. QQEW, we talked about that already. We've got XLC, the communications. This is still below its 21-day moving average line and 50-day moving average line really being dragged down by Meta. So even though Alphabet is doing well, those two are the biggest components. Meta really dragging it down along with a lot of other areas. XLY, this was up considerably, almost 2%. Amazon and Tesla are the two big components here, but this is still below its 50-day moving average line.

59:58And as we've been noting, if you look at RSPD, the discretionary equal-weighted, this has been in a downtrend for a while. So a big day today, up 3.3%. But this does have some work to do because it's just been in this down. I think the home builders are in that group. And I think that's probably what did it. Like pull up like a Lennar or an NVR. And that's probably what was helping out the equal weight, you know, almost 6%. But they're just not in position. I would have thought that would have been like in the real estate. I'm pretty sure. Oh, okay. Yeah, I'm pretty sure. I could be wrong. Okay.

1:00:35No, no, no. I believe you. But, yeah, so that's where that's where XLY is. RSP. We talked about that. Certainly the all eyes have been on XLV lately, the health care sector. This just looks so different from everything we just looked at. But now, look, a lot of these, and this is what I wrote about in my column today, I used Amgen as an example. A lot of these had very poor relative strength just a few weeks ago when it was time to start buying them. So, yeah, sometimes you have to kind of recognize that sector rotation when that happens and something hasn't participated in the rally, especially a strong rally like we've seen this year.

1:01:19when the sector rotation happens, you're going to have some very depressed relative strength ratings. And, you know, you and I have been mentioning that was the case with Apple back in 2004 from a perfect cup with handle. The really start of its move, you know, between the, you know, the iMusic, the iPod, the iMac, all those things that really just kind of, this was even before the iPhone and iPad, you know, these things that really started the move in Apple, the renaissance, if you will. What was Apple's relative strength? 55. Yeah, 55, you know, when it was setting up in that cup with Handel.

1:02:00I'll say the XLV was, that was the one thing that was on the bubble for us adding to, potentially adding to Swing Trader today. They were adding it back because we had reduced it or removed it because of market conditions. But this is, I think, the only thing actionable right here. but we already had everything we had on Swing Trader was in medical. So we just didn't, because what you risk is - We had the exposure, right? If you get a real move back into like, let's say chips in the AI space, the medical will probably pause or pull back a bit. And then, so we didn't want to get over our skis there.

1:02:39But I think XLV is the only actionable thing right now. Mm-hmm. ARKK, that was coming back a little bit strongly, but again, up two and a quarter, but still right around the halfway point from yesterday, so still has work to do. XLB, the materials that was above the highs of yesterday, intraday, closed in the upper part of the range, but still below the 200 and the 50-day moving average line. XBI, another area, I do have a position in XBI as the swing trader. You know, this one just looks, again, very different from everything else. The biotechs really having a strong move lately. KRE somehow snuck in there.

1:03:25Let's go back to the XBI just for a second. I know we're over an hour, but it is what it is. The yesterday's action, the downside reversal there yesterday, it looked really bad in isolation, but on a relative basis, it was really good. But even given that, my expectation was it to come in and test the 21 day because that would have been normal and natural. So when something is more powerful than normal and natural, you want to pay attention to it. And it just looks it doesn't want to go down. Doesn't mean it won't go down. But again, that's I think that's the space to be in. So the regional banks, those were doing fairly well.

1:04:08But again, this was getting support around the 200-day moving average line, but still below the 50-day, but very strong relatively. And then ITB, which we already talked about, having a strong day. I'm Laura Thurow, Managing Director with Baird Private Wealth Management. For so many of us, life is busy. Between balancing family, career, and community, finding the time and focus to keep your financial plans on track can be a challenge. At Baird, we understand. Our financial advisors will partner with you to create a plan that's uniquely yours. One that gives you peace of mind and confidence so you can focus on what matters most.

1:04:45Discover the Baird difference at rwbaird.com slash WSJ. Let's go ahead and take a look at some stocks. And no big surprise, you chose all medical. So here's AbbVie, a nice looking cup with handle. Really came up strongly here above its 50-day moving average line. Again, yesterday just didn't stick out in terms of an ugly day. And today you were above the high of yesterday. And, you know, you look like you're on the verge of a breakout. This isn't the leader in the space. But what we were doing was looking for things that were in position to be bought. So go down to the quarterly numbers on this one.

1:05:26So you're not looking at anything to write home about. You got negative numbers there, mediocre sales growth. But it just tells you that this one is in position. I would do a little bit of research if you have the time. It's a B or a C quality thing, but let's go to the daily. At least it's in position. So more so from a swing trading standpoint is, you know, if it can take out really today's high or the high from two days ago, you know, then you could have an entry using today's low as your stop. But I would say a lower quality. Mm hmm. BTSG, Bright Spring Health Services. I do have a position to us.

1:06:08I've actually, you know, held through this little little choppiness here because I had enough cushion for it. But I don't know. Would you consider this almost like a little mini double bottom? Absolutely. Yeah. So Bill O 'Neill would want six or seven weeks of a to be an official double bottom. But that's in the spirit of a double bottom, in my view, and kind of like a shellfish, you know, a shelf but double bottom where you undercut the first one. And even though it was viable a couple days ago, I think it's still viable right here. And you do want to pay attention to the ones that had decent days yesterday or that were kind of disconnected from the overall market of what that did.

1:06:53And like pull up AVGO Broadcom, which is kind of the poster child for what happened yesterday. In the morning, it looks great and it's way up there. And then it comes and goes down or let's pull NVIDIA back up, which was kind of directing the traffic yesterday. You know, breaking out and going above that downtrend looked great. Looked like it was going to go through 200 in a blink of an eye and then crashes back through. It's 21 day and it's 50 day. Now let's go back to the stock we were just looking at. And it looks like it wasn't even in the same environment. You know, it was up. Yes, it was off the highs, but it stayed above the 21 days.

1:07:32So that's what I'm looking for right now. Things that are uncorrelated in the very short term. And that's very easy to do right now. Just look at the last couple of days. Search for stocks that didn't have moves like that yesterday. Anything that had a tiny spread yesterday, that's going to go to the top of my watch list, assuming other things look good on it, not just something down and out. But look at yesterday's spread. Tight spreads yesterday means it's disconnected from what's going on with all the gyrations. And that's where I'm going to spend most of my time. And this looks good, and I think it's still buyable here, even though the original buy point out of the cup was your classic place to buy it or off the 50-day earlier this week or through the 21-day earlier this week.

1:08:20But now it's right at a double bottom, so I think it could be added to. I just wish I had a bigger position. It's a tiny baby position. Yeah, I hear you. And let's go ahead and wrap it up with AlphaTech. So this was the poster child for what I was talking about, about being disconnected. I don't really know this company, but I was looking through and going, hey, what is something that I would like to leave people with to study stocks like this this weekend? So what do you have? A classic, you know, breaks out of a cup without a handle, goes up more than 20 % within three weeks. That's that little flag there, the 27, telling you that it's doing something, you know, that there's something special there, potentially.

1:09:05Then holds above its 21 day this week. But really, it's all about, for me, it's all about yesterday. It is very small, you know, close, almost unchanged. And although I don't use volume because I think volume is dirty, in this case, I would look for stocks that had low volume yesterday because as a sign that it was disconnected and not just part of a bunch of baskets that are being traded, you know, because if you buy the Qs or you buy SPY or SQQQ or what have you, you're buying a bunch of stocks and they're just going up and down with those money flows. This one looks disconnected. Let's go to the weekly just for a second to see the overall position.

1:09:51And of course, it's in the medical space. The bad part about it is that bad week in 2024. I wouldn't trade this stock without going and researching and understanding what happened that week. I didn't have the time to do that. But you have a couple other bad weeks in there after that, but it's been able to power higher. But when you've got a bad break like that, I like to wait until it can prove itself, that it can hold above that for a material amount of time and price. And it's been able to do that. So that's forgiven. But I would just pay attention. I would go and research that so you know what the story is there.

1:10:30Final question. NASDAQ. Okay. It's too early to call this a bear market. You know, this is just, you know, right now it's a correction. Do we need a follow through day in your mind? If Bill were here, he would be looking for a follow through day without a doubt in my mind. But my thoughts on Bill's original work that he did on the follow through day before both of us were born. And I'm older than you. So that means I'm really old because you're old. You know, you're ancient. You're a grandpa and all. But he was doing it to get into the bottom of bear markets. So April, that was a bear market. I don't care what people say.

1:11:09That was a bear market. That's where you would originally want a follow-through day. Then he kind of boxed himself in a corner because he started saying, okay, once you get max distribution, and originally that was four days, and it was five days, and it was six days, and then it kept on changing. Then he said, when you get all those days of distribution, you need a follow-through day, which is problematic. And that's why one of the reasons why we came up with the market school rules to kind of fix that problem. He would be looking for one there. But I know we both know him, knew him inside and out.

1:11:42And he would change and be like, if things started acting right and there wasn't a follow through date, he would be like, oh, well, blah, blah, blah. And, you know, you know, like. Here's why you didn't need it. Yeah. Why you should have been buying anyway. You know. Yeah. So the way we look at it with our rules, we don't need one right now with the market school rules because we still have a buy switch on and a plus one. What does that mean to people? Nothing unless you've taken the course, so don't worry about it. It just means you can still act on buy signals using that philosophy. We just haven't gotten any in a while.

1:12:16Yeah. Just to be clear. So what I'm going to be looking for is moving back above that 21 day, which is also in line with the 50 day. And that is going to that's what I'm going to act on or like a real upside reversal. Like today wasn't it was just technically in a spreadsheet is probably be an upside reversal, but it didn't have enough of down or move back up. It's just a day that took out the low from the prior day and closed up as far as I'm concerned. So to answer the person's question, no, I don't. I'm not looking for a follow through day. I'm really wanting the volatility to subside. We're also in this position that we could get a lot of there's a lot of news, both negative and positive.

1:13:03But I think a lot more on the positive side that could come about. One thing that we didn't talk about was the Fed funds futures. You know, that's been all over the place recently. If you haven't looked at it, I mean, that's kind of moving the market around. I think there's this obsession with the Fed funds futures for the December, I think, December 10th meeting. Dude, it's not a big deal, in my opinion. It's like, OK, a quarter rate cut then or are they going to wait to the next meeting? That's what everyone is getting worked up about. I think it's a non-event. And Powell did a really good job at the last meeting setting it up to put bullets back into his gun that he could shoot.

1:13:45And that means with another rate cut. So they won't use it if they don't need it. Yeah, thanks. So here's why don't you walk through what that is for folks? Because it would take me half an hour. Yeah, it's just basically saying that there's a 30 percent chance right now our target rate is between three and a quarter and four. There's a 30.6 % chance it stays pat, 70 % chance, 69.4 % for a cut. And again, to your point, you can see how different that is. That 69 just yesterday was 39. A week ago, it was 44. A month ago, it was 98. So it's all over the place. And look, this is just what the Fed futures, this is what people are kind of betting right now.

1:14:30It changes a lot. And as we saw over the last couple of years, it was horribly wrong. The guesses that they had were just horribly wrong, especially the further you went out. So just keep that in mind. But Powell pays, my opinion is Powell pays a lot more attention to this than he lets on. He does not want to surprise the market unless he wants to surprise the market. And right now, as he's getting ready to retire, he doesn't want to have any egg on his face. And so I think that's why he was tempering because he doesn't have everyone on his team thinking the same thing. You can look at that at the at the minutes or just as people are talking.

1:15:08And so some people want to pause a bit. Some people want to cut now. The good thing is no one's saying let's raise it. So we're going in the right direction. It's just what speed are we going there? Are we in the fast lane or are we in the slow lane? And, you know, I think the market's obsessed about something that's not that big of a deal. If some of them were saying, let's raise it or pause forever, then that would be a big deal. But it's just the pace at which it's going. And, you know, I think that that's, you know, the market always has to worry about something. I would say there's bigger issues out there than that.

1:15:50Well, hey, Mike, it's time for you to get to the gym and it's time for me to start working on charts. Rachel, our producer, also has to join me in putting all those little analyses on the IBD50 and Big Cap 20 charts. Can I say one thing? We're going to go. Sure. I just want to say I hope you and your family have a great time in Hawaii next week. You will be missed. Yes. And have a lot of fun and we'll be counting the days till you get back. okay uh yes and i hope everyone has a very happy thanksgiving we'll see you all on monday ibt live uh we'll start up uh 6 20 uh pacific time and 9 20 uh eastern time so uh join us for that if you haven't already at investors.com slash ibt live or you can come right back here tomorrow uh we'll be live after the close uh monday for the stock market today video have a great weekend everybody take care

1:16:45We'll see you next time.

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