Stocks Bounce Off Lows To End Wild Week, Nvidia Looms; Valero, CME Also In Focus

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0:25Good afternoon and welcome to another episode of the Stock Market Today video where we try to wrap up the week's action for you and give you kind of a little bit of homework for the weekend and a little bit of where are we now for the markets. And that has been a challenge the last couple of weeks. But to help us break it down is Ed Carson, our news editor. And gosh, you're also on the earnings cheat sheet. You've got all the hats you're wearing. So what are some of the stocks that you want to talk about today, Ed? Yeah, around here at IBD, there's not many men without hats, I will say. Okay. Even though the safety dance might be useful.

1:03I want to take a look at NVIDIA. Obviously, that's going to be huge for the coming week. and Valero and CME as well. But we can look at a whole bunch of things if you'd like. Yeah, I've got to say your music references are very different from Mike Webster's. Just going to note that from the outset. Okay, I'm going to go ahead and share my screen and we'll go through some of the markets and then kind of try and make sense of what we saw today. And again, this week. So the NASDAQ composite, that finished, look, it was downright ugly for a little bit there. With the gap down at the open, we were down almost another 2%, down 1.9 % intraday, but finished with a 0.13 % rise.

1:50Queues were kind of in the same boat, almost exactly. The SPY, when we take a look at that, that finished down, it looks like, about a tenth of a percent. It was also well off its highs, down as much as 1.4 % intraday. So a lot of these, you know, we got up to maybe the upper quartile of the NASDAQ and maybe the 65 percent range for the S &P 500. And then IWM, the Russell 2000, that finished with about a point one nine percent gain I'm showing. And in the upper quartile, that was down over one and a half percent today. But let's go ahead and shift back to the NASDAQ real quick, because certainly, Ed, it seemed like at least for the start of this week, it was a big, OK, tech, no good.

2:40Medical, yay. And then it was kind of, you know, seemed like that's what the story was even this morning. But then, man, a lot of those tech names came back with a vengeance. I mean, we started pretty broadly. I mean, it was a powerful gain on Monday and a lot of techs did rebound, like Palantir surged higher. So there were a lot of names that looked strong. Then it was sort of pausing for a while. There wasn't a whole lot of movement in there. So it was strange because we continued on. A lot of the gains early in the week were at expectations that the government shutdown would end. And it did end on Wednesday night, but then it became a sell-the-news kind of event.

3:17But, yeah, we surged on Monday. And so, you know. And that was when it was kind of like a deal was imminent. Right. Even on Friday, there was progress. I was like, OK, there was enough movement that you started seeing it was probably going to end soon. And that turned out to be true. So big pop. And then, yeah, I mean, so it was interesting. The Dow hit a record high on Wednesday. So there was clearly and that's partly reflective, as you were talking about, the drugs, the financials were doing better. And so that's why. And there's a lot of those names in there. But then on Thursday and Friday, everything Thursday, really ugly once again.

3:52I mean, AI plays really sold off. Some of it may be concerns that the Fed won't cut rates in December, but that might have just been another excuse. I mean, honestly, and then we bounced on Friday. And yeah, in the upper part of the range for the most part. But, you know, we didn't close well for the week on a lot of these things. Like the NASDAQ, they weren't very high in the range, especially where we started on Monday. These weren't great closes. They weren't the worst, don't get me wrong. And we sort of faded to the close today. I don't know, the last several weeks, obviously, the last few weeks have been very volatile, daily and weekly.

4:24But, you know, really the last several weeks, it seemed like four weeks ago, it was like we were getting out of that. But really, you know, for the last couple of months, we really haven't gone anywhere. But I have not had a good time. It's not been a good time for me because it's like you buy on some strength and then you sell on weakness. And, you know, it's been tough out there. Well, even and look, one of my strategies, I love upside reversals. You know, just I think that they're great. They help you manage risk. But what we're seeing a lot of is, you know, you get a perfect Friday upside reversal last Friday.

4:59You get the follow up strength, as you would expect, with a gap up above your 21 day moving average line. It's like game on. And then what do we get today? An undercut. But so you have to kind of you have to really be thinking seriously of cutting as you as you undercut the upside reversal day. But then what do you get? Another upside reversal. So you're kind of almost buying back stuff. Now, this time around, a lot of times I do watch the first five minute bar, the first 10 minute bar. And we did really start coming back very quickly today. So that helped if you just were able to take a little bit of a pause just to see how things shaped up.

5:40And then what I was doing for a lot of my stocks is, OK, I was just raising my stock. You know, what started out was let me see if I can get out at a better price. Started out to, oh, you know, I would buy this stock today if I didn't have it already. So very, very unusual action. And again, as you mentioned, like October wasn't great, you know, because remember, we had that October 10th. the the spat between President Xi and President Trump, you know, that kind of started this latest sideways cycle. But it seemed like it was over when we got back to highs. But then again, November, November hasn't been any kinder than October was.

6:21Yeah, I would just say that I sold some stuff on Thursday, didn't on Friday, because things reversed so quickly, I was getting ready to. Yeah, yeah, yeah. But because, you know, I bought near the top of the hammer, I wasn't going to buy at the very low on that prior Friday because we were tumbling. I mean, maybe some were quicker than others, but I bought. But I was down on a lot of things. And especially if you bought on Monday, this Monday, you were really down by Thursday. So I think a lot of people probably needed to be cutting things, especially there was a lot of AI plays, had some pretty big losses that really undercut.

6:52And we'll take a look at things and it'll be clear that a lot of growth names were a lot worse than just sort of round tripping last weekly gains. Yeah. And I think that's an important point, Ed. You know, when you do some selling, you know, it doesn't have to be everything. But because you were doing some selling Thursday, and I'm right there with you, I was doing selling as well, it kind of gives you, for an upside reversal like today, either the cash to redeploy. And in a lot of cases, you were potentially getting things at lower prices, even if you were buying them back. You're getting them at lower prices than where you exited.

7:26But it also kind of takes some pressure off when you get that gap down. like like we did this morning. One of the ways I was personally able to wait a little bit was because I had reduced on Thursday. I think if I hadn't reduced on Thursday, it would have been a lot more panic mode where it's like, oh, my gosh, I've got to do something. I'm just losing too much money. Yeah. You want to let off some steam before the pipes burst. I mean, because that's because you're going to you're going to at some point you may think you won't, but you will. I mean, And so, yeah, so protect yourself from yourself.

7:59You know, before we before we move on here, I also wanted to just kind of address the breadth issue. RSP, which is the equal weighted S &P 500. It was looking like it was getting some traction here after the Friday reversal. Last Friday's reversal looked like it was getting some traction back above the 50 day moving average line. But notably, that went right back below its 50-day moving average line on Thursday. So it's kind of back to, it's not necessarily that the equal weighted is showing a lot of weakness because there's still some areas, medical and some areas that haven't been participating.

8:46financial was looking good, but then it got clobbered on Thursday, as you said, with a lot of the fears that a Fed rate cut isn't going to be, the chances of that are going down. So what are your thoughts here on the equal weighted? Yeah, the equal weight does show that it was interesting because they weren't falling as much necessarily, but they were already weaker. I mean, when you're in a weaker position, you know, because Thursday's drop wasn't as big as the NASDAQ, say, but it was it made it go through the 50 day line. And that's another thing is that And, okay, the major indexes didn't have a good week.

9:18The Dow actually was up and the S &P was up a little bit, but it was a tough week. But basically everything else is below the 50-day. I mean what I mean in terms of like RSP, QQEW, the Russell, and some of the growth ETFs like FFTY, ARKK. And I know we can go with all that, but just everything else is showing weakness. Some of it significantly weaker. Yeah, there's some bounces here and there, but that's way below and way below last Friday. never got above the 50-day line. And the ARC is the same way at QQEW. So there's a lot of weakness out there that, you know, in there. So again, on the one hand, it's nice as maybe some of the speculative names came off and the market is still holding up somewhat.

10:00But the market needs to, you know, can't show a lot more damage before I think we'd really be, you know, concerned. Yeah, very good. Well, let's go ahead and take a look at some more sectors and just kind of get a sense of what's going on there. I'm just going to another area. OK, as we usually do, we start with the worst first. And man, one of the one of the worst areas right now is the cryptocurrencies. I bet, you know, here here's the Bitcoin ETF, Ethereum, not much better. But what's what's what's happening here? I don't know, really. I mean, obviously, speculation and high beta stuff is weak.

10:41And maybe, you know, the dollar has been strengthening. And if you think the Fed isn't going to cut rates, the dollar in the market, the stock market reopened. I mean, the stock market, the government reopening is also one reason why you're not going to have the Fed cutting rates, perhaps. Because now, I mean, because that was a concern that the economy would see more weakness. And so that was an argument for cutting rates again. So, I mean, all these things, maybe there's just pressure on it. But I don't know why it's down so much. It really is. And, you know, but you can see the relative strength.

11:09It never really confirmed that, you know, it got above a high. in August, but the relative strength didn't confirm. Got above it to a new high in early October, but didn't confirm. And now it's really been, you know, breaking down. Got back above the 50-day line a few weeks ago. Couldn't hold. Got back down below the 200-day, got above the 200-day line. Boom. So again and again, so this is something clearly, unless you bought this, you know, when Bitcoin was at 20 ,000 or, you know, like way below, not 20 ,000, it was something way below. There was a lot of sell signals to be getting out of this.

11:40So I don't know why it's doing it, but it's that is not I don't want any part of it, really. That's kind of my go to for my crypto analysis. I don't know why it's doing it either on the upside or the downside. But I can look at the chart and say whether I want to be partaking or I don't want to be partaking in a similar way. You know, gold gold was really hit hard this this this morning. It was off a little bit yesterday, but really slammed today. Gold miners were a little bit better. There were a lot of these that actually recovered quite a bit more and finished well on the top of their ranges.

12:17But what's your take here? I don't know. Maybe there was just some selling because people were trying to liquidate things because they were losing elsewhere. I don't know, because you would have thought that the fears would drive people into it. But if you think part of it is because the Fed is less likely to cut, I don't know. But ultimately, gold had an okay week. I mean, this held up. But it's also a reminder that you can have relative strength, but if the market sells off, you can still be a loser. I mean, you know, I'm not saying gold, gold was fine this week. I mean, but you can see how Thursday, Friday, yeah, it wasn't that bad, but you know, held up better than the market, but still, you know, well, I guess maybe it didn't, but it's like, you know, it's still something you have to watch out for.

12:54You can, you can't just say, I'm going to be fully invested in defensive areas and everything's going to be safe. It just may mean you fall less. You know, cash can be a great position in a trading market. Well, and it's, you know, one of the tough parts here, too, is, OK, you would see maybe an entry here as it crossed above its 21 day moving average line. And then what do you do when it fills in that gap? And again, this morning it was below the 21 day moving average line, below its 50 day moving average line. You know, that's that's enough to really kind of give you some unsettled, unsettled dots for what's supposed to be kind of the safety play.

13:33XLF, a lot of the financials were hit hard yesterday. This was back below its 50-day moving average line. Down a little bit more today. This did not look like the rebound that we saw in a lot of other areas. Yeah. I mean, obviously, there's other areas that were a little stronger and gotten up to new highs, but they still got hammered Thursday, Friday, say. I mean, so not great. I mean, obviously, the relative strength line has not been great for this, but this was improving. And the relative strength line didn't weaken that much in the last couple of days. But again, just when you thought maybe you could buy them, then you could get hammered.

14:07If you bought on Wednesday, say XLF, which would have made some sense, you know, you're down, say, 3%, you know, on that. And that's just, you know, right away. So not great there. I'm going to contrast this to a degree, KBWB. The, you know, this was still, again, weak, but at least this closed better. It closed better and it started off stronger. But the problem is if you bought later, it's like you could still see those losses. But yeah, it's just, it's just, ah, you know, where do you got it? Where do you get your edge? Anywhere. It just finds it hard. You think you got a spot. Aha, I'm going to diversify.

14:43I'm going to go here and then, you know, but so that was disappointing. I still, a lot of stocks in this area are still worth watching. Maybe they can set up again. They are by no means broken, whereas a lot of growth names really suffer damage. These are not, these could easily be repaired. Yeah. Just walking through a couple kind of fast. XLB, that was, you know, getting back above its 200-day moving average line earlier, got turned away at its 50-day moving average line. That's the materials. NLR, the nuclear plays, that's been suffering. A lot of these things that were on a little bit more of the speculative side, power related, those were really ramping up in a big way in October.

15:26But man, once they peaked, they've come down quite a bit. This did finish in the upper part of the range, but still in a little bit of trouble. But I also want to spend a little bit of time on health care, XLV. Now, this did come down today, but this does seem to be an area where we are seeing a lot of that movement into these stocks. Yeah, and I think ETFs might be a good way to play it because some of the names are a little extended while others may be like in bottoming basis. I mean, it's nicer to find individual stocks, and they're definitely individual stocks in XOV, XBI, and some things.

16:04But yes, this is clearly coming on. And just like, say, Eli Lilly, the relative strength rating, I'm sure, was terrible. If you go to the related panel, I'm sure if you look what it was like two weeks ago, three weeks ago, I'm sure it was pretty lousy. But yeah, 46, you know, four weeks ago, you know, three months ago, 23. So it's bouncing back. And that can happen. When you do a sector rotation, sometimes the relative strength is really weak. But that can quickly come back. And we saw that. This is definitely an area. Defensive growth or growth, they're somewhat insulated from the economy because insurance covers a lot of it.

16:45The government covers a lot of it. there's a lot of reasons why you can go to healthcare when things are, are, are okay. Not great. And yeah, definitely a lot of things to mine here. Yeah. And we will get to kind of the biotechs in a little bit as well. That just ended up being one of the strongest areas. Shutting this down over on that panel, XLC, the communications, of course, this is meta and Google, you know, combined for about a 40 % weight. This is, This is almost at the lows that we saw in October, you know, below the 50-day moving average line, below the 21-day moving average line. Not much help there.

17:25Yeah, Google still looks okay. Didn't have a good week, but Meta just looks awful. I mean, there's nobody around it. Right. And when you're at 20 % weight, it's hard for XLC to get much traction there. RSPC, you know, this is the equal weight. It doesn't look much better, to be honest. But XLY, speaking of kind of a big difference, the XLY, this was looking a little bit stronger, but Amazon and Tesla, you know, both are the big components here. And Tesla certainly suffered quite a bit this week as it got below its 50-day moving average line. The RSPD, which is the equal-weighted consumer discretionary, also not showing much strength right now.

18:15Yeah. So sometimes we had a couple of big names propping them up that take them out and they're still not still not. Right. We talked about RSP again, just going through where things finished and also QQEW. That was also off its lows, but still below the 50 day moving average line. ARC K, you know, taking a look at this, this did reverse, but man, this has been hit. It's below both its 50 day moving average line and the 21 day moving average line with that 21 day crossing below the 50 day now. Yeah. I mean, some of this is Tesla, but there's plenty of names in this that just hammered. And we saw high beta growth was really hit in the FFTY arc, you name it, NLR.

18:57There's a lot of things. Whatever had those high names, quantum plays, everything, they're all really, really hit. And that's just, you have to recognize that. All the fun that you might have had in September, October, that's not fun anymore. Yeah, right. Now, Staples, the consumer Staples, that seems to be kind of an area of, well, temporary strength. It's still below its 50-day moving average line, so not something to get overly excited about. But, you know, there are some of these stocks that are kind of considered where you hide, and that has been a little bit stronger as of late, as you can see with this relative strength line popping up recently.

19:42We will get Walmart and TJX. Walmart, I'm sure, is in this, and TJX, I don't know if it is, but certainly could be sort of that. And those two names are doing a little better. And so there'll be a lot of retail names with those two in particular. Yeah, Walmart is the top weighting there, over a 10 % weighting. So yeah, definitely worth looking at and keeping an eye on that earnings report. Continuing on with our list, we also have SPY that we talked about, the Industrials, those, again, still below their 50-day moving average line, but off their lows today. But let's talk about SMH. This got right down to the 50-day moving average line, reversed, and actually closed positive for the day.

20:26Yeah, this is interesting. Taiwan Semi, which looks probably the closest to this, did something very similar, as I recall. Yeah, I mean, okay, not quite as strong. It actually basically is trying to hang on to the 50-day. But yeah, SMH is still looking good. This is another one where AMD is sort of too extended. But if you wanted to play it, SMH seems like a good way to play. right now because, you know, there's out there, but really it all comes down to NVIDIA Wednesday night. I mean, that'll be just absolutely enormous. But this is an area that's still holding up. AMD is strong. NVIDIA is in a buy zone.

21:01Taiwan Semi and Broadcom aren't that far from being, you know, useful. And there's a lot of other names, but it's often very much the giants. A lot of other chip names like Alab and others are not looking good. And they're just not. So definitely have to be good. So SMH actually seems a reasonably good play right now. If you wanted to play the chip sector, I would be hesitant ahead of NVIDIA earnings. But this seems like a good spot and it's holding up pretty well. Yeah. And we did add this to Swing Trader. I got a position in a related ETF myself. Um, XLU, uh, the utilities now, you know, Utes has been one of the ones that we've been watching very closely.

21:46Uh, a lot of the electronic, you know, contract manufacturers, the, the, the, the people providing power, uh, to all these AI, uh, data centers and everything like that. Uh, those have been under some pressure, but you had, uh, something like, uh, you know, VRT, which is on the leaderboard, getting support. And again, XLU getting, you know, it didn't close well, but it closed positive. So that's why it's kind of a little bit better than most today. Yeah, I mean, and, you know, I think sort of a side note, it's a lot of this is where buying right is important, buying early or buying close to the buy points important, because we've seen a A lot of with the volatility, it's always important.

22:29But honestly, if you bought extended in April or May, you probably were OK. OK, because things were rip-roaring and you ended up you could get away with it. But in a sideways, choppy market, boy, oh, boy, if you are going to do buys, make them make them earlier or make them right around the buy point. Otherwise, chances are it's hard enough as it was buying right. But if you didn't buy right, you're really in trouble. I've been confused with XLU just because it's a combination of super defensive and AI. It's like, what the heck is that? It's like Dr. Jekyll and Mr. Hyde. I don't know what, I mean, it's more of the safer AI type of plays, but it's still a weird situation, you know, as opposed to what you would normally expect with that.

23:14Yeah. FNGS, the Mag-7, again, that had a nice reversal. We already talked about the Qs. XLRE, that ended up the real estate ETF, the sector ETF, that's still below the 200-day, still below the 50-day moving average line, but finished with a 0.3 % gain. ITA, the defense, you know, this ended up, you know, finishing at the top of its range, but that's below the 50-day moving average line. There's some select names in there that look a lot better. There are select names that look better. And you can see even this one, you could imagine just one or two good days. You could see a real trend line where some of the other things are so up and down, up and down.

23:53It's like, OK, it goes back above the 50-day line. What does that mean? But here, if it went clearly above the 50-day line and got above the short-term highs, it's like, oh, OK. So, you know, I mean, you could see that. But, yeah, there's definitely some names worth looking at, but not many that are in position right now. XLK, the technology ETF, sector ETF, that was well off of its lows with a positive gain over half a percent. And worth noting, of course, what is it, NVIDIA and Apple are the two big heavyweights here. You know, Microsoft up there as well. But RSPT, a little bit of a different story, you know, not up nearly as much.

24:32Yeah, yeah. You know, just a couple of names. There's still so much dominance in that area. IGV, the software that was getting support at its 200-day moving average line, some suffering lately there. But again, this software is some of the, you know, some of the bigger names that aren't necessarily participating as well. One of the areas that does seem to be coming on a little bit stronger, however, is XLE, the energy. Of course, XLE is really dominated by ExxonMobil and Chevron. But even if you looked at the equal weighted of this, this is RSPG. That's not a bad look there. No, there's there's definitely some things going on.

25:15And I think OIH is doing better, and there's definitely select names in there. Refiners are doing better. I don't have an ETF for that offhand, but, like, there's a whole bunch of names like VLO, which I suggest we look at, but that are either in buy zones or extended now. So, yeah, and I think natural gas has been rising. So natural gas plays also, you know, some of those are improving, you know, like UNG. with UNG. I mean, it's not tremendous, but it's picked up a fair amount in the last few weeks. So, you know, whether it's oil or gas, there's definitely some strength there. You just never know if that's going to continue.