Stocks Fall As Oil Prices, Yields Surge; Snowflake, Hinge, Taiwan Semiconductor In Focus

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0:40Ed Carson:hey ed and hello everyone happy thursday welcome to stock market today september 10th with stocks falling as oil prices and yields surging ed we'll get into that what else do you have for us today I want to take a look at Snowflake, Hinge, and Taiwan Semiconductor. Okay, we'll check out those stocks. But first, a closer look at those major indexes. A bit of a weakening picture, but some potential support at key levels also in the works. So here's a look at the NASDAQ composite down about six tenths of a percent on the day. It's hovering right at that 50-day line, right above 26 ,000. The S &P 500 today also down about six tenths of a percent.

1:27Ed Carson:This losing the 50-day moving average and 7 ,600. So a notable development there. also blue chips down a similar percentage here ed lost the 50-day line a couple of days ago so continuing to drip lower there and then small caps continuing to take it on the chin here with a rustle down about one percent undercutting lows going back quite a ways here yeah so i mean the nasdaq is now the holdout yeah it's the one index that's holding up and barely and the risk is that the NASDAQ and S &P will start looking like the Dow and Russell. Now, we rebound from here. We get a CPI report. We get other things that go well.

2:12We could take off and able to say, see, we've came to support. But it's not just that the indexes are looking weak. This is four down, straight down days. But even when the market was little uptrends, it was hard to make headway because, oh, you're in software. Oh, then it falls off. Oh, you're in chips. Oh, it falls off. It's just been hard. Oh, you're in copper. Oof. You know, it's just sort of like just, it's just all those things, you know, it's been hard to make money even when the market has been sort of in uptrends. And the market is not in an uptrend this week for sure. So I think investors should be fairly defensive and thinking more about, even if they're not looking at the indexes, if they're just being cautious about new buys and cutting losers or cutting stocks that are round tripping very short term gains.

2:58they're probably cutting exposure just because of the way the market is acting.

3:03Ed Carson:Exactly. And we've been talking about how the S &P had a power trend type signal going back a couple of weeks ago with how it was trending above the shorter term moving averages. But Ed, there hasn't been a lot of power and there hasn't been a lot of trend. So even though technically the power trend wouldn't officially end until the 21-day crosses below the 50-day. I think it's safe to say that investors should be looking at other signals, exactly what you were pointing out. Are you making progress? What's the industry group leadership looking like? I am, however, staying open to the fact that, or the possibility, that we could get support at some of these longer-term moving averages.

3:52Ed Carson:I don't think it's going to be clean cut, though. You know, you look at the last digestion that we had, even the 50-day was not a good guardrail for the major indexes. So lately, it's been the 21-day. I haven't been able to hold that. My fear is that we could see something similar with the 50-day and ultimately chop higher like we did in the late 90s. Of course, you never know what you're going to get. But incremental portfolio decisions seems like the way to go here and being cautious about those new buys, as you said. Yeah, and keep those watchlets ready. And, you know, doing incremental moves also means so the next time we go up, it may be another head fake.

4:33But you don't want to like, wait, well, if you wait till for sure it's working, like, oh, I'm not going to do anything until the S &P hits 9000 or something crazy or hits a new high. Well, a lot of stocks will be out. So it's a tricky business. you know, every once in a while you got to put your finger into the water and see if it's too hot or too cold. And eventually it'll be just right. So little nibbles here and there, assuming we don't break down. If we break down, then you just start getting out completely. But yeah, and just be ready. Build those watch lists because you're right. It could just take one or two good days.

5:03And all of a sudden, everything really looks good. There are a lot of stocks that really aren't that far. Some stocks that fell today, well, maybe they're constructive bullish pauses, you know, and you just don't know right now. So don't bet one way or the other. You have to be nimble and ready for whatever the market gives you.

5:23Ed Carson:Exactly, because you're right. It could just take a couple of days for things to start looking good again. We are retesting that breakout area on the S &P 500. So I think the bulls definitely want to see a retaking of that 50-day line in pretty short order. Further deterioration would not be ideal. And then I think on the long side, a lot of us would like to see a recapturing of that level before making decisions, unless you do get into more of an intermediate correction type situation, and then you can get a follow-through day or some traction off the lows and still be well below the 50-day. So we'll see what we get with that.

6:09Ed Carson:but you're right, the NASDAQ being the loan holdout here. Yeah, I think waiting for a bounce and waiting until the coast is clear, I think if traders do that in a choppy market, that's where things can be even more troublesome, right? Because just when things start to look good, we can get those shifts in the market. So for areas where traders are seeing progress, We've talked about some of the portfolio strategies. What about also taking profits into strength? Yeah, I think there's definitely an argument with the rotation. And even if we get better, that could still be happening. It could still be tricky.

6:49You know, there's an argument for, say, if you get up 5 % or 10 % to take partial profits, you know, like treat it almost like a swing trade, you know, to lock in something. And whatever works for you, you've got to figure out what is the strategy that will make sure you don't have losses on winners while not getting out too early for your stay like you want to be able to get in there and again when a choppy market you got to be a little bit more quick to maybe take partial profits on the way up or on the way down even if they're pretty small uh so that's what i would think again different people have different things but a lot of it's your psychology what will help you uh you know maximize your gains out of things exactly and i feel like

7:30Ed Carson:if you can contrast that with the periods where we have very strong power trends, that is where you want to be a little bit more patient, let your winners run. So in this type of environment, I think it makes sense. Dell, bonus stock here. Dell comes to mind. Shout out to Harold Morris on our team on IBD Live yesterday at the highs, really, saying that it was time to lock in some profits in Dell. Of course, we'll have to see where it goes from here. Still holding above that. exponential moving average. Okay, let's pivot and look at some of the other signals underneath the surface, adding to the picture of the market right now.

8:10Ed Carson:Ed, here is RSP. This was also sort of a bright spot in the market until, I would say, over the last week, week and a half or so, we've seen a changing picture in sort of your average stock. Yeah, it's just that's a real reflection. And today, one thing that probably helped the NASDAQ and S &P from looking a lot worse was Apple, you know, because Apple had such a strong day. Our stock of the day today. Our stock of the day. Yeah, exactly. And that's almost at that early buy point that you sort of draw on that line there. So that was really great. But that was almost like a refugee. That was almost like a counter thing.

8:44It's almost like a negative signal. It's not a negative signal, but it is sort of in that sense, like it's a refugee from AI. Spite to safety rather than so. So that preserve thing, but you look at RSP or you look at QQQE, they just look weaker. I mean, the NASDAQ's above, but not QQQE and not RSP. Those are really coming down. So aside from a few mega caps that have done okay, it's not looking good for a lot of stocks. And so I think that's what a lot of investors have seen. Mm-hmm.

9:19Ed Carson:Let's also now take a look at how the bond market is impacting stocks. And this really paints a picture here, doesn't it, Ed? The 10-year. We'll go to the weekly chart to add even more perspective on the historic levels that we are at. Yeah, this is the highest since late 2023, and that was just under 5%, like fractionally. So we are getting very close to what would be like 20-year highs on the 10-year yield. Obviously, markets are not, the best-sent maneuver didn't pay off, even though he's trying to do things. And surging oil prices have been linked to higher yield prices over the last several months, and oil prices were surging.

10:04But we also had, you know, we had, and the 30-year yield had the highest close or highest settlement in 22 years. so i mean just enormous things uh and that we don't have the two-year but the two-year yield that would actually the biggest daily gain and that's more reflective of expectations of the fed and the two-year year yield hit like the um that's the highest you know in 52 weeks and fed rate odds are now up to like 73 percent or so that we'll get a hike next week and if the fed doesn't raise rates you could even imagine the bond market having a real negative impact it could sell off and have the long-term yields spike on that?

10:43I don't know, because right now - Interesting. So, you know, it's not like, well, if the Fed doesn't do anything, we're all going to be okay. It's like, not necessarily. It's one of those, I think the bond market, again, who knows? We'd have to see.

10:56Ed Carson:Darned if we do, darned if we don't. I think we're in one of those situations. It's not a good situation. The Fed's not in a good place situation right now. But those are surging, and obviously crude oil skyrocketing. And those are just enormous headwinds for the market and the economy. I mean, look at the, I think oil prices have gone up like 22 % in eight days, eight sessions. I mean, just really running up. Over 100, that's a new high, but actual crude oil futures, that's the highest since May. It did get up. So we're like at 102 or so. It got to like 112, at least intraday one day. So it did get higher.

11:32So it could go higher, but yeah. Saudi Arabia said output was the worst since 1990. It just seems like we're going to have a protracted. There's a lot of negative headlines out there, and you can just see it, how oil prices dropped. You can argue the stock market has been extremely resilient given that, but it's a little bit like it could also break. It also could crack very hard. On the flip side, if for some reason oil plunged below 90 and yields dropped 20 basis points over the next week or so, you could imagine the stock market takes off. So you have to be open, as you say, you have to be open-minded for that the market could suddenly take off.

12:11And there's definitely a lot of things that, you know, so just be ready for that. But yeah, a lot of pressure on the market right now.

12:19Ed Carson:Yeah. And I think, you know, in the past, we've also talked about these potential news failure events, right? So not only looking at what the news is, but the market's reaction to that news. So if we get some negative news and you happen to get some sort of upside reversal or positive market reaction, that could be a very interesting tell in itself. Not banking on that, obviously, but we have seen that in past market cycles. So we'll be on the lookout for that, but we'll look at what's right in front of us in the meantime, Ed. Let's go over, you know, you just go through some of the sector action here and what we're seeing, starting with oil services, but I'll follow your lead.

13:13A lot of oil sectors have been doing well, but a lot of them are extended. So, aha, here's a sector that isn't extended. Oops. Even with oil skyrocketing, I don't really know why it's down this much, but it is. And a lot of names were down. And it just shows you even when you know exactly the sector that's doing well. Copper got crushed by tariff concerns or like there wouldn't be tariffs for the U.S. And then there's also just higher yields and higher oil prices aren't probably good signs for prices and demand for a lot of these metals. So a lot of metals were hit really hard today. There are individual reasons.

13:47There's been a lot of one-off bad news for biotechs. I mean, there are biotechs and health care stocks that are looking good. They were actually, but they're also, it's just, but looking good and actually rising and actually showing real strength is another matter. I still think this is a place to watch, but yeah, it's just tough. XLV as well. Both of them going below their 50-day lines. So, you know, and there were little pockets of things, but again, it's more relative strength than strength for the most part.

14:14Ed Carson:Yeah. Maybe we'll get some really good pullback buys, right? That's absolutely, yeah. The silver lining. Yeah. Staying positive. uh let's go to smh you know two times now here we have a very clear rejection at a declining 50-day so short-term shorting opportunities for some that's what's one of the interesting things you could argue that there's certain stocks that are holding around early buy points above their 50-day lines and we'll look at one and so you can measure oh that could be constructive but then you also step back and go, this does not look very good. So I think, especially for those who get really, and I do it too, I want to lean towards, you know, AI growth stocks, but this tells you, nothing else, even if you don't want to short, it's like, just be real careful in this environment.

15:04Right.

15:06Ed Carson:Yeah. I think also too, with something like the chips, we want to see higher lows right i think if we if we make a new lower low that would that would not be a good sign technically and then igv software uh another area where we we were seeing a lot of promising action and now all of a sudden this too uh falling below levels that we don't want it to breach and it's also and you'll see it's like in the morning it looked pretty good and hack looked pretty good which is the cyber security there's a lot of qualities but just you know even when it's like so you really have to be cautious about just oh it's a strong open in this market really don't get too excited by a modest modest gain you want to look for those pullback buys but you have to really temper it or if you do things just you're going to have to there'll be situations like this where you say well maybe i should just back away or be really ready to back away quickly I mean, so, yeah, it's just tough.

16:07Ed Carson:Mm-hmm. And so, talking about software, this is a good segue to snow that we want to highlight today. Earnings a couple of days ago, big gap up, then a fade. It's filling the gap more, Ed. But on a weekly, maybe looking— On a weekly, there's some tight action. There's actually a tight pattern. And I think on the—you know, and the whole week ended up fairly tight. even that horrible week, relatively. It's not, it wasn't tight that particular week, but it was still, it's holding up pretty well on a weekly closes basis. And I think you can somewhat forgive Snow's big sell-off because software was just getting crushed at.

16:45It was just the worst time. It's almost like showing up to a party. Even if you're the coolest guy, if you show up when it's ending, you look a little foolish. And that's a little bit what I think Snow's earnings were like. It's like, hey, look at me. And then it's just like, and it was just so, I think you can be a little forgiving, but at the same time, that just tells you no matter how much strength you seem to be having, if the sector and the market is not working with you, this is what can happen. It was going so strong and then faded. So I think if it gets above like the 342 zone, you know, and it almost was doing that today, you know, I could see that being a place you could do something.

17:26Again, everything's really tricky. Nothing's easy. I mean, I would, you know, But I'm a little more forgiving on this one, but I think it does need to show a little bit of strength from here.

18:04Ed Carson:going back to this weekly chart here that relative strength line if you're just focused on that that is looking pretty impressive there so let's look at the closing range on that big week add some more color there 41 so yeah just enough we like looking at 40 or more so so yeah from that view, we can give it some excuses, right, Ed? But holding up really well in the sector. Okay. Hinge also holding up nicely here. It is down about 4.5 % on the week, but above a rising 10-week line. So this is your point too. Healthcare, that medical space, an area to watch. But some of these stocks are pulling in right now, hinge among them on the day-to-day, it was down about 3.3%.

19:03Ed Carson:So in sort of this battleground area, right, between the mid-80s to mid-90s. Yeah. And again, it was sort of this wild action on earnings, but now it's calmed down. The relative strength line has held up pretty well. You know, again, it just takes off. It gets above that upper band. I think that would look actionable, but it's also, you know, could easily break below oh, and then, you know, again, it's, we're in this battleground area. And it was a battleground all day because it fell almost to the 50-day line very early on. Then it came almost all the way back and then faded again. So you can't just say that moment again, oh, look at that.

19:40It looked impressive. And when the market was getting better, it's like, hey, you know, but I do think you want to get above those levels. It just, again, no matter how things are, it just, you know, in a choppy market, market is just hard. Even if you're making smart moves, it's just hard to win out. Whereas in really strong, powerful markets, even if you're not doing everything right, you're usually going to be pushed along. And so you just want to try to make things as easy as possible. This is why we talk about being much more cautious, especially with new purchases, because it's just so hard to do anything.

20:11Again, I don't think this was ever actionable today, but you could imagine there were names that sort of popped out and were flashing buy signals, but then faded as the day went on. Yeah.

20:21Ed Carson:And I think depending on your trading style, some stocks might undercut the recent lows. I could also see a scenario where it undercuts this 84 area, undercuts the 50-day. You get a nice reversal. And then that could be a buy versus the breakout to highs. And then you're setting your stop around a longer term moving average. So I'm trying to keep my mind open to those sorts of buying opportunities because I feel like the last pullback, right, there were a lot of stocks where, you know, you have the overall market coming under pressure right when the strongest stocks are touching their 50-day lines.

21:02Ed Carson:And that can be a good time to make new buys. So keeping that scenario fresh in my mind too. Let's go to TSM in the chip sector, working on the right side of a base. So we looked at SMH, so contrasting TSM with that. This is in a better position here, potentially still rounding out the right side of a base, Ed. Yeah, and there's a lot of stocks in this area. This one is one I like more than some of the others because it's the lower ATR. And so if this one falls apart, the falling apart will probably be a lot less where there's like Bloom Energy or other things that could fall 20 % in a day. you know because again there's a lot of stocks that are like this right above or right below some short-term highs still above the 50-day line so there's a lot of them you should be looking at them but i mean i think you have to wait and it could be this is what i talk about it could be constructive if this forms a handle all of a sudden okay because before i was like man do you buy it right here and then of course then you just sort of figured a fade would happen and it did uh you know a lot of names but if it paused let the 21-day line at least start to catch up maybe the 50-day line starts to level off, turn around.

22:15It's like, that could be constructive or we could be headed for a drop right below the 50-day line, just like it did a few weeks ago. So today, this one announced like August sales, they were really strong. I don't know if they were really surprising, but they were strong 53 % versus a year earlier, just showing a lot of demand. But we know there's a lot of demand right now. So that's not really a surprise, but it's still nonetheless. Yeah. So this one I like because of its lower ATR, but there's a lot of names and you should be watching them. But it's very much an open question about whether this is the beginning of a handle that will deliver or the beginning of a fade back below the 50-day line.

22:55Ed Carson:Yeah, exactly, Ed. And that average true range, looking at that volatility or lack thereof is definitely something that we like looking at in choppy markets, the lower the volatility, the easier to handle. And let's go to Oracle and Adobe, two after hours earnings names. So Oracle, of course, big name in the database software group, up 7 % on earnings in a terrible position, right? But could this influence the broader software sector. We'll have to see. And then here's a look at Adobe, also a pretty weak stock, seeing shares currently down about 1.2 % in After Hours Ed. Any notes on these two earnings?

23:43Yeah. I mean, Oracle in particular, I think that might have more relevance for like NeoCloud and just AI and AI infrastructure names, because that's really where a lot of, it's more of a hyperscaler. So what it has to say about, it had strong results, strong guidance in cloud infrastructure revenue doubled, but there's been concerns about borrowing and this has been going way back when we talked about Google and Amazon losing money. Well, Oracle's been losing money in terms of cash. They've been burning cash for a long time. So if they, it could be on the conference call. I could imagine this one moving higher, a lot higher or a lot, or reversing lower.