Stocks Fall To Key Levels, Silver Dives; Meta, Viking, Guardant Health In Focus

28:10I could see that easily. Or on some not so good news, just going back through. So you're really vulnerable because you don't wanna have too much of a cash position. Because if we do rip or if you've got a heavy cash position, you want to be ready to buy. But you also don't want to be too heavy because we are in this position where, you know, like what we saw with the silver bringing down tech stocks. Like what does silver have to do with tech stocks? Nothing other than sentiment, you know. Yeah, I do think my feeling was that if we could get through the end of this coming week, this next week, when the big earnings are through, jobs reportedly through.

28:51just, you know, it feels like if we're at highs, then maybe we can go on another leg. But this next week is still going to be very busy. And we could have head fakes. I mean, we could have good news from Google and Amazon then tanks or, you know, whatever. And so we could have head fakes in either direction, you know, around this area, which is sort of what we've been doing with the NASDAQ this whole time. I mean, this NASDAQ, there's been a lot of things. It sort of has been getting a little bit tighter, but, you know. It's choppy for swing traders, I can tell you that. From personal experience.

29:22Since you mentioned Amazon, let's go there because that's also setting up in a base as well. So there's potential. And this is what you always want to look at it. Even if I'm not in Amazon right now, I've got a million Amazon boxes in the other room, as everyone else does. But this is setting up a base on base, is right in the handle portion on some good earnings. this could then be the next, you know, Google type of move. But, you know, we saw what happened the last earnings, just gapped up for a couple of days and then faded away. And so I guess I'm just bringing up that we are in a catalyst.

30:03We're in need of a positive catalyst. And we're in that position where we could be starting another leg up. I really thought earlier this week, if you would talk to me two or three days ago, I thought we were starting another leg up for sure. It just seemed like we got the Fed behind us, you know, and it seemed like he didn't do anything wrong at the, you know, whether you like Powell or dislike Powell, at the meeting, this meeting and the last meeting, he didn't do anything wrong. And he did everything that he could do right and probably will until he retires. Yeah. And look, the market was almost at highs.

30:43The S &P was at highs. The Nasdaq was on the cusp. It was finally getting through at least this area. It did feel like it. So that's part of where the disappointment is, is that it's not so much the weekly change is how the week ended, you know, in that sense, especially the high names. But just to move on and Russell, that was that was that one had a bigger weekly loss. It wasn't like today's loss was huge. But I mean, the Russell tends to outperform up and down in terms of the daily weekly swings. but it hasn't fallen back into its face. Qs, we've looked at kind of things. Yes, the utilities, they're not doing great here.

31:24I did not mean to have that on my list. I guess I accidentally put that in. No worries. Let's see here. SPY, of course. The industrials had a decent week. I think they may have, they rose 0.4%. So that's trading pretty tightly. Some of the aerospace names were doing well in there. Bitcoin, we know, has been doing terribly. RSP still holding the 21-day line, not much of a drop. Financials, I mean, were down. I mean, some of this was like Visa and MasterCard as well, another utility measure. Consumer discretionary, that's still holding up. I mean, there's still some names like Walmart, some of the retailers still doing well.

32:10I mean, Tesla and Amazon, I think, are in this one as well. Is that correct? I always forget. Yeah, I do have a position in Tesla. Yeah, that's fine. They're holding up. The two of them are about 40. I want to say they're about 40 % of that ETF. So if you're trading that, you've got to be aware of what those are. You mentioned Walmart. Walmart looks set up as well. It's not a super dynamic company, but that looks like it wants to move higher. And on a day like today, it looked like it was not trading at all with what the market was doing. And those are the ones you want to look for. Not like a Coca-Cola.

32:48I think Coca-Cola, go to KO for a second. I think that was up today from memory. But unless there's something new at Coke, like they're going to make something that, you know, doesn't hurt you. Well, I guess I think they sell water and stuff. But that's just a laggard that you buy that RS line, you know, for months and months and decades, really. So that going up, you don't get too excited about unless there's something really new, new CEO, new product or something like that. But the Walmart has been it's been this stealth, you know, leader in that in that space for for a while. And it's just, you know, really trading nicely.

33:32And I should have a position in it. I mean, it's got pathetic sales and earnings growth, but it would be nice to balance out the account on a day like today when I had some stuff that was getting hit hard that, you know, to have a little Walmart in your account. So just think about that. It doesn't have to be Walmart, but having some slow pokey things that don't have as much of a correlation with your bigger positions. Let's see here just to go through some more. Real estate, going back to the dailies here. And that's sort of been moving sideways for a while. Communications. I mean, I think Meta is a big part of this one.

34:11So that was active. Yeah. Meta and Google are a big part of that one. Yeah. Healthcare. I mean, there is sort of fading off on some of these names. And I'll just also call up XBI and IBB. So some of these things were coming off. They're still pretty close to highs. there still, but they didn't have a great week. And healthcare actually could have been worse. I'm actually surprised it wasn't worse, given how UnitedHealth and the health insurance, which looked terrible, I'm surprised that XLV didn't go down even more. But energy strong. I mean, oil is up at four-month highs. Natural gas has been skyrocketing.

34:48I mean, it's not too complicated on that. Staples, let's get some of that whole Coke thing. I mean, that's not the greatest sign when staples are rocking. that's the worst sign in my opinion is when you have like real utilities like not the ai utilities or the staples anything slow and pokey um that that's when that's your best area for the day that's a sign that it was truly a risk off day because people are going to hide what everyone watching here we're all um we can all go to cash we can go 200 long we can go you know way short, anything in between. But the fund managers out there that really control the market, the mutual funds have to stay fully invested or close to fully invested, like 97 % invested.

35:39So if they're selling off their whatever tech stocks is blowing up on earnings this week, they have to hide. They have to put that money to work. And what they can do is hide in, like, let's look at Johnson & Johnson, which has been, you know, just inching up and inching up. or I guess more than inching up lately. It's kind of like - It's been doing pretty darn well, yeah. Yeah, I mean, that's trading like, I mean, that could happen to Coke. I don't think it's going to, but I didn't think Johnson & Johnson was gonna do this either when it broke out. So you gotta keep an open mind, but that was one that Bill and I would always put on our institutional buy list whenever the market was rough like this and we would be taking off all of our tech names, knowing that our clients, which were mainly mutual funds, had to go into something.

36:28So we would look for the Johnsons and Johnsons of the world, slow, pokey things. Go to a monthly on this one for people to get an idea. You know, just slow and steady where someone can go in there and hide. And, you know, it's a preservation of capital, not increasing your capital for moves like this. But finally, Johnson and Johnson is actually changing. So there might be. There's been a few good quarters of earnings the last couple of quarters. So I haven't really been following it. But revenue growth picking up, I mean, not super, but it's something. Yeah. Okay, well, we're through those. So I guess we can move over to the stocks.

37:10Every day, the people of Meta work to protect over 3 billion users around the world. Our people get that the eyes of the world are on us. So there's no version where we can't have really good and really robust systems. My name is Nathan, and I support our product risk and compliance team. We've been using AI to help make sure everything that needed a privacy or a risk review was getting it, and everything that needs a set of human eyes is getting one. Get the facts at meta.me slash risk. Yeah, and meta was one we wanted to take a look at. Obviously, you know, or Microsoft tanked, meta had a really strong number here.

37:49Yeah, so this is a terrible looking base. Like, go to the weekly chart on this one. And Zuck, no, I told you to stop listening in on our call. Whenever I talk about it, you don't have to listen. That dude will never, like, he's always listening. Ed remembers that joke from way back when. How do you remember? Okay. So with this one, it's a terrible base if you do a week-by-week analysis through this base. Oh, yeah. It's just, there's nothing good in there. There is all that, but in earnings can change things as well as that, you know, you can't have Google being the only mega cap that's going to lead the market.

38:33So it looks like the money is now flowing into this one. And you always want to put yourself in a position of you're that big fund manager and now you're just selling off your Palantir or your whatever stock. Where are you going to put it? You can put it in a bunch of small caps or you can go into the Johnson & Johnsons or Cokes of the world. But if you want to have some juice in there, you can go to a meadow when it's starting to move back up. So I think this isn't something that I think is viable here from the way we look at stocks. But two weeks from now or shorter or longer, this is something that might end up setting up.

39:13So you want to start watching it now. And let's go back to the daily because when this one has moves, it can have really sustained moves. What I like about it is that it traded inside of yesterday's trading action. So even though it gapped up, it really had traded from the prior day's close all the way up there. We just don't show it on the chart because that's what a gap is. But, you know, I would love this if it could test out 700 and firm up there and then come back up, give us an upside reversal. I'd be all over that and be forgiving the base because of that good reaction on earnings. And that's what you want to look for is having a good reaction on earnings, then setting up week, two, three, four weeks later to give yourself a good entry point.

40:03You just don't want to buy it sticking straight up in the air like that unless it's a really there are times when you can do that. But they are a few and far between and not with a base that's this ugly. But you can trade it by using like an XLC. Let's go back to that. And this is how I like to trade it. You know, I go, okay, well, Google's setting up or, you know, it does have earnings, but it's been acting really well. And the meta has the earnings behind it. And that's the bulk of this one. And you have some other ones in that space that we're doing well. I think Verizon had a big day. Was it Verizon that had a big day?

40:37Yeah, Verizon had a big day. And AT &T had a – Verizon skyrocketed. And AT &T had a good day the day before. So, yeah, even these laggards had some nice gains as well. Yeah, so it feels like money is, you know, flowing that way. So if you're wanting to trade it, but you don't want that risk of a shakeout with a meta, then just going with an XLC is, you know, is an alternative. Very good. Very good idea. Another name, you know, aside, we talked a lot about growth names and AI. Viking Holdings was a winner this week. Didn't have a great day today. but a strong week. Yeah, so I really like this one for a lot of different reasons.

41:21One, it's the bass itself. Hover over the depth of that bass. So it's only 9%. And how deep is the last one? 14. 14, and the one before that? 40%. Okay, that's exactly what you— That was during that whole stretch, you know, that was so great. Yeah, that's true. So you do want to see the bases getting tighter and tighter. And one measurement of tight, it's not the only one, is the depth of the base. The other one would be looking at that average range during that time frame. But they pretty much go together. So having that really nice, tight, flat base there that goes along with getting support at your red line, which is your 50-day, That's a classic, you know, positive type of action.

42:16Now, we don't have earnings yet on this one, but we had RCL that really moved this one. So let's go to its competitor. So that had a massive move up, but just kind of like Meta, it didn't have a good base structure that was coming out of it. Way better than Meta's. But they all kind of trade together, the CCL, the NCLH, this one. And let's go back to the Viking. Now, Viking is a little unique because they're river cruises. And my parents had gone on them a few times and had a really good experience with them until I think Viking canceled their trip without notice during the COVID time and sent the ship over to China or something.

42:58That didn't go over well with them. So I think they're done with Viking. But everything they said about it, they just loved the experience there. I love going on normal, you know, non-river cruises. So they have this niche audience that is really repeat customers. And so that is— And well, after these are affluent, older, so it's usually—yeah, and that's been a bit stronger part of the consumer, too. Exactly. And it's one of those things where the people who do it tend to do it once a year or a couple times a year. And that repeat business really ends up helping. and really how it's been trading so much better than the, we don't have to go there, but the CCL, the RCL, and the NCLH, this has been your leader by just trading tighter and more constructive.

43:47And then yesterday gave you your entry point. Now it's sold off today because the whole market was selling off, but it still was able to hold up well above yesterday's low. The weekly looks good. The earnings and sales are okay. They're not spectacular. They're just mediocre to okay. But let's go back to the daily for a second. How I would treat this one is if you don't own it, there's no reason to buy it here, but I would wait for it to take back out yesterday's high or today's high and then use today's low as your stop, as you're lying in the sand. And that's how I would go. You know, that's how I plan on going about this one.

44:33And so I think it looks good. And it's it's a lot slower than many of the other names that we end up trading. Yeah. Just to bring up and you mentioned RCL. And again, this is why we talk about why it's so important to be paying attention to other earnings, especially early on, like the first ones. You know, when it's the eighth bank or the 20th internet company, it's like, okay, fine. But when it's the first one, it really makes a difference on all its peers. And obviously, you know, if you had bought it off of here and then RCL came out and said, nobody wants to go on boats anymore, Viking would have sold off.

45:09Not as bad as RCL, but it would have. So this is why you want to be paying attention to those things. It's just, and that was a really nice reaction yesterday. And you're right, it held up pretty well here. And another name that's, did you want to say something? Sorry, do you want to say something? No, no, no, I just was saying, let's go to the next one. Yeah, let's go to Garden Health. And some volatility, but back in a buy zone. Yeah, so what I like to do is look at what's blue when the rest, when everything else is red. And that's what we had today. So anything that's up 3 % on a day where, you know, silver is going down over 20 % and, you know, everything else is having a hard time, that's telling you that it's disconnected from the rest of the market for one reason or another.

45:58So I need to do some research on this on the fundamental side of what was there any news? Was there some like what you were talking about, the Viking and the in the RCL? Was there something else in the group that that was happening that is making this look positive? And now this broke out of that last base in in failed. But then it was able to try one more time and then it failed again. But it's finding support at the 50 day. there's different levels of failure. It's just like, it just failed enough to just kick you out unless you're very, very patient. And then the next time did the same thing.

46:38So it's just, it's going to frustrate people. And that happens with some of the best stocks. But where my eyes go to is that power from pivot flag, that 47 % that happened out of that last base. In a blink of an eye, it goes up 47 % and then never gave that back. work that's a power from pivot concept that bill came up with you know in 1962 off a certain teen now it doesn't always work uh definitely does not always work but when it does work you really want to pay attention to it and so i like this i think it was viable today i didn't buy it today because i was in defense mode and reducing exposure but if i was looking to increase exposure yesterday It could have been bought right off a 50-day.

47:23Not really my style because it would have still been under the 112.42, so I would have wanted it to get back above there. It did that today. So in my opinion, it's totally viable. Let's go to the weekly. Now, the problem with this is the negative earnings on there. It has no earnings. Even though those are blue numbers, is it's just saying a negative versus a negative, a smaller negative versus a negative. And so it doesn't have any earnings, does have good sales growth and slightly accelerating. But this is something to sit and study, but also study why did it go down from 2021 all the way down to 24 and pretty much in a straight jagged line, straight and jagged.

48:12Doesn't make any sense, but you know what I meant. and now we're going in the other direction. So this looks, and you can really see that powerful week in there. That was a game changer to me. Not a high tight flag, but in the spirit of that moving up from 50 to up to the 100 plus area and then holding in tight there. So definitely on a weekly basis, it's closing almost unchanged with last week. So it's like two weeks tight in there. So I really like it. But I need to do more research on it, you know, before I can go in and trade it from a position trading standpoint. I know, I agree. It's been some volatility here.

48:53I haven't gotten into it, but yeah, I've been eyeing it. And yeah, it was, but yeah, so definitely some medicals were, I mean, if you have a, the economy is still doing fine. I mean, there's this and that, and there's volatility and defensive growth and growth is like, I mean, garden isn't a safe stock because it's money losing in that sense. But medicals often are an area that you can find in these sort of choppy areas where people are uncertain, but it's not like the economy or market is bad. So we'll have to see. But that's another reason why we like to look at some of these things, because to have some diversity, if you had a bunch of silver stocks, or if you had a bunch of like a few days ago, where, you know, like when we had all the AI stocks fall, you know, it makes it a lot easier if one stock falls a fair amount to stomach that if you have other leading stocks from other sectors.

49:43Exactly. Okay, well, Well, why don't you stop sharing and I'm going to share my charts. All right. Okay. And it's so nice having you on, by the way, Ed. You know, I know. Justin can be a real bore. So I agree. Justin is so much fun. But what people don't realize is back when we used to work in the office in L.A., you sat right in front of me. And boy, man, you cracked me up all day long. And people don't realize how smart you are, man. Like your analogies are so quick and so deep and so on point. It's just mind boggling. I just, it would take me all week to think of something half as good as what you think of, you know.

50:31I really appreciated the time there. It's like I learned a lot from you. I still learn a lot from you on all the videos you do. So, I mean, I really appreciated that time as well. Yeah, lots of fun. Okay, so now we're going to do our rest in peace, Bob Weir, take a step back. Anyone who wants to know what that is, there is a real meaning behind that. And you can Google it or look on my Webby Rambles on from a couple weeks back. But anyways, what we do is we like to take this time to step back and focus on the weekly candles. And what we're going to do is go through a series of charts here. And we're not going to take too much from any one chart.

51:11We're just trying to paint a picture in our head of what's the current character of the market, risk, reward, all that stuff, and just see what's good and what's bad and anything that's setting up giving us clear expectations. So with this one, on a weekly candle, it's actually not that bad. The first thing that I noticed is you have a positive body, meaning it's blue. So you close slightly higher than you open. That's always a good thing. Happen in the middle of the bar. That's another good thing. You had a higher high this week and a higher low this week. That's a good thing. Now on to the, and another good thing is you had a long bottom wick, meaning you traded all the way down here and you ended up closing here.

51:55Those are all the good stuff. Oh, one other good thing is you hit a fresh high. So you've got all that good stuff. So what about this is bad is you close well off your highs. But that's kind of like what happened this week and then you fell down, but that was more news related. But just you want to be intellectually honest and just look at each one by itself. And that's not bad, but it's also not giving you a clear expectation that it should go up or down next week. It's more your expectation is sideways on here because closing right in the middle with the same distance of your top wick and your bottom wick just doesn't give you any indication of what it should do.

52:41Whereas last week you had this tiny top wick, larger bottom wick with a big candle on their body, that gave you a clear expectation that it should have gone up this week. Didn't mean it was going to, but that was your expectation. Let's take a look at the, based on that one chart, take a look at the NASDAQ weekly, completely the opposite in a lot of ways. Yes, it hit a higher high. Yes, it had a higher low, but you had a negative body, meaning that you close lower than you open. That's why it's pink. And on top of that, you had a much larger top wick than bottom wick. That is a weak position. So this traded all the way to here, closed down there, and then just a little tiny bottom wick.

53:29So that tells you, that gives you an impression of your expectation of sideways to down for that one, but not falling off a cliff, you know, just, you know, being honest. so IWM this one and I do have a position in SPY as well as IWM I forgot to say that earlier so what's good about this is it met your expectations last week was a terrible candle in that you have this huge top wick here even though it was a positive body and the body was inside the prior week's body it was a bad candle in that really long top wick and if you don't understand candles. I did do a Webby rambles on on candles. It's on my YouTube channel, Webby 5150.

54:15So you can go and watch that if you're if you want to know more about candles. We did add candles to market surge beta. So you want to try that out. So anyways, this candle is terrible. Not horrible. I shouldn't say terrible. I should say it's a bad candle that you had a lower high, a lower low, and you had a big body, which is negative. But it wasn't the worst looking candle I've ever seen, but it does give you an expectation of it going lower. So again, we're gonna go through these in isolation and you're gonna get some things that contradict themselves. That's why we're putting the mosaic together.

54:56So the next thing we're going to do, this one is very important. This is my regression channel. And I'm doing this from the one anchor point is today. The other one is November 21st, this day here. And don't get hung up on the math or anything. This is how I like to look at it. You've got your guardrails here, your top guardrail and your bottom one. Those are one standard deviation away from this middle line, which is your regression line, your line of best fit. I just call it home base. That's where it wants to go. And I will stop this. I think we're about 45 days and I always stop those anchor points out at 50 days.

55:40So next week or the week after, whenever we hit 50 days, we're gonna stop this. But this is pretty much your data set that you're going to be using for this trend. So your assumption is this trend is going to continue until it doesn't. Let's look back at an old trend. This was an old trend that we had here starting back on May 12th. And that one went out 50 days to July 23rd. And then that was the data that you were using and it was continuing on that trend until it broke out of it over here on October 10th and then couldn't bounce back up. So at that point you had to throw out that channel and you were waiting for a new trend.

56:19So let's go back to what we had here. So how do I use this? What I do is I have first the assumption is that it wants to be somewhere near the white line. That's its mean reversion type of thing that it wants to go there. When it comes down underneath your one standard deviation, which is your solid green line, your expectation is exactly what happened here. If it's healthy, that it wants to mean revert, go right back up to that white line as quickly as possible. Well, that's a healthy market where it comes down, goes right back up where it should. Not too weak and not too hot. Too hot is a separate problem.

57:01But this came up to half a standard deviation above it, which is a normal general area for it to kind of want to mean revert or at least stop. That's what it did. But it got a little bit out of hand yesterday, came all the way back underneath that one. And so on this one, it's good that it bounced back up and doesn't look that bad. It looks like it's really close to that white line. So this is now another sign along with the weekly candle that it doesn't look that bad. There was a lot of volatility today, but just calling it the way I see it with this one. Now, let's look at the NASDAQ a little bit different here.

57:41on this one, you know, tried to break above the one standard deviation and got turned away, which is normal and natural. You see that over here, kind of gets up there, runs out of gas. Sometimes it runs out of gas at the half standard deviation, which is the red dash line. And then it came back down. It just came back down a lot more than you would think. Going from one standard deviation above it to one standard deviation below it in one day, that is extreme volatility and you don't see that very often. And that is a big negative sign. Yes, you did try to come back up today, but you got turned away.

58:19So this does not look good. And this one looks like it should come back down and test it a little bit more, which is contrary to what we saw with SPY. So this looks weak. Let's take a look at the IWM. Hopefully this is making sense. I'll have to do a video on this too so you guys totally get what i'm doing this one has been the iwm which i have a position in and we have to say it every time but a blanket statement for the rest is iwm and spy i have a position in so this one goes up and down through this like it should comes up to the one standard deviation comes back around and what's nice and you like to see it not even get down to So a minus one standard deviation, which did this time and kind of get support in around its 0.75.

59:09So this is still normal and natural. And what you should expect with this, if it's healthy and if this is the leading index, it should mean revert and go back up to that white line next week. That would be normal and natural. We will see. Our next chart here, this is our 50 % retracement. You can do this on interday charts. You can do it the monthly charts and everything in between. It's an art of where you pick your highs and lows. On this chart, I'm picking the October high and I'm picking the November low. The gold line or the yellow line on there, that's just your midpoint. So that's your 50 % area.

59:49You want to be trading in the Northern Hemisphere, not the Southern Hemisphere. Northern Hemisphere is positive. Southern is negative. This is not about the map. This is about the chart. And so this is constructive. And the fact that it's still staying above those old highs, that's a very good thing. Let's take a look at the NASDAQ. Still okay. Not as strong as SPY, but using those same anchor points on there or highs and lows, we're still in the Northern Hemisphere. So that's a good thing. IWM, it was so much stronger than the other ones that I was using different levels. So I was using the January 2nd, high with the high or low with the high from the 22nd.

1:00:33And that just stopped right at its 50 % retracement. So this is not a magical line in the sand. It's a general area. So next week, we would really like from this lens, we want to see it living up in this area. It can trade down below it. That's certainly fine, but you want it to be living in this area. Our next chart, and if you have anything to say on any of these, feel free to chime in. I'm just trying to power through them. I wrote power through. I didn't really have anything to add. I would just be just pausing in just like, look, I have something to say rather than having something to say.

1:01:07Okay. No, this is great. Feel free. Okay. So spy, these are my levels and what you should do, and I'm trying to do this so you guys get in the habit of doing it yourself. Don't count on me with my levels, just do it yourself. And you can have a lot more lines on here and often I will do that, but then it'll get a little bit too cluttered. So I've pulled a lot of them away and just looked at key ones. But really yesterday's low becomes another key level. So I'll just put that on there. And, you know, let me see. It doesn't want to hover there normally. Well, anyways, we will take that away. But yesterday's low becomes a good, important line in the sand because that also goes along right with the 50, which is your red line there.

1:01:58But really the level you don't want to go below is the low from January 20th, which is the 676.57. Take a look at the NASDAQ. Same thing here. Yesterday's low is very important, but the low here from the 20th is more important than the low from the 17th of December is also a key level. Take a look at the IWM. it tested its very important level, which was a high from mid-December, December 12th. Here, it tested that today and bounced off of that a little bit. These lines aren't like set in stone where it's like, oh, it hits that level. You got to sell everything. It's a general area. You want it to defend a level and sometimes it'll trade a little bit below it and for a couple of days and then go higher.

1:02:51That's okay. You're just looking at it and saying, okay, can it stair-step higher? And by stair-stepping higher, you're staying above these lines in a material way. So that one is still okay. We will go to our next chart. This is something I've been using for many, many, many years now. It's just putting a bunch of moving averages on the chart from very short-term to longer-term ones. And I really like the Fibonacci sequence, and I think it's really helpful. You can Google that if you're not familiar with it. So I use very short-term ones here. Like that's your three-day, a three-day, a five-day, an eight-day, a 13-day, a 21-day, a 34-day, a 55-day, 89-day, and so on.

1:03:34And I use all of those in there and the spacing using the Fibonacci sequence is really helpful. And what you're looking for on this is for the short term, the three to be above your five day and the five to be above your eight day and your eight to be above your 13 day. That's a solid trend like you would have had over here in September. Once you start getting them one by one coming, curling over like we're seeing here, that's telling you you're in a choppy environment or you're in a topping environment. This feels much more like a choppy environment than a topping because we've been having that happen really since October.

1:04:15And if you're a swing trader, you can feel that because you get chopped up in an environment like that. And where you make your money is when it's trending. Let's just go back, and I'm going to zoom out a little bit. This is what you want to see. Areas like this where your short-term ones are above your mid-term ones, your mid-term ones are above your longer-term ones, that's where you really gas and where you're making a lot of your money. When you're in an area like this where they're going back and forth, that's another way, other than just looking at your trades to know that you're in a chop fest, as our buddy Arush would call it.

1:04:54So this is kind of more par for the course. It's not a change in character. It's just doing what it normally does or it has been doing for the last month or so. So it's not breaking down, but it's not changing character in a positive way. And the blue one is your 21 day and your tan one is your 34. That's why they're a little thicker because those are more important to me. Let's go do that. I don't talk about the 34 much, but it is very important. Here's the composite. Again, this one looks worse than SPY. And that's what we've seen with all the other ones. And you get a lot of these short ones coming back in.

1:05:35So just, I know this might be overkill for some folks, but I actually look at more things than this, but everything is price-based. I don't use any secondary indicators. So all of this is based off of the price. No volume, just the price. That's the one thing you know. You don't know if there's bull and bear data or there's any other psychological things or any ways of looking at breath. I think they're silly at best and problematic. Puts a call and all those things, even VIX. Just if you want to study the price of something, use the price. And that's what this is. This is the moving average of it.

1:06:12Now, this is a bit concerning because you get your three crossing down below your five and your eight and your 13 at this point. So that's not what you want to see. Certainly not that steep. But that's also what we've seen with this one. Now, we're going to do something very simple. And this is a nice way of looking at it. We get rid of all the junk and we just look at the 21-day moving average. And what I like to focus on is the low versus the 21-day, where you're going to have your most successful trades. from my experience has been when you're trending above that 21 day where your low is trending above it.

1:06:58And we've had two days where we've traded through it. So by definition, that is not trending above it. We want to get that low back above it and to stay above that. But at least it defended it. And you definitely don't want your high underneath there. Let's go to the composite. it. So again, worse as we would have expected. And then the IWM much better than any of those by a country mile, because look at all this white space that you had between the low and your 21 day for all of this time. And then all of this time, now you're coming down and testing it. So from this lens, this looks normal and natural.

1:07:33And it looks like a test of the 21 day, where some of the other stuff look more problematic. So that's why we look at multiple ways. We've got two more series of charts to look at, and we're almost done. Let's go one more. Okay. So this is our Webby RSI. So this is on SPI. This is just measuring what we were just talking about. The little histogram down at the bottom, that's just your low versus your 21 one day expresses a number and that number happens to be your ATR or your average true range. So it's just saying, is it a lot or a little? And this is your numbers over here. One, two, and three.

1:08:17Three is a lot. One is normal. Two is healthy. But right now we've got nothing because our low is not above it. So we don't have a Webby RSI as far as a blue histogram on there. And so what you want is a wall of blue, like we had over here, where that's telling you, when you see a big wall of blue histograms, that your low is above your 21 day. And that's where you really want to gun it and, you know, and hold on to your things, because that's where you can make a lot of your money. When you've got, you know, a little baby step of blue, and then nothing, and then a little step of blue and nothing, that's problematic and that's where you're going to get chopped up.

1:09:02And the orange line, the burnt orange, that's when your high is underneath it. That's a whole different problem. Like in that bear market that we had earlier last year, your high was well underneath that. Did you have something on this one? No, no, I agree. Okay. So the same thing on the NASDAQ, you know, problematic here. We don't have anything there. Let's look at the IWM. This one, we were getting a nice wall of blue. We're actually getting some really positive readings in there, but now we don't have a Webby RSI on there because it's trading through the 21-day. We need to get that low back above it.

1:09:44And let's do one last chart. This is my daughter's favorite ones, the Bob Marley off high. So this is just measuring in terms of ATRs, how far off your high are you? The green area, that's four ATRs, and that's the sweet spot where you want to stay in. The yellow area, that's four to eight. That's your warning area. Once you get eight ATRs off your high, you're kind of in a problem area that's down in here. So that's one way of looking at it is just saying, okay, here's SPY, and we're still in the green zone. Okay, that's good. The next way you can use this is looking at it. Is there a level where it likes to stop at and get support?

1:10:31And if you look at it over here during this time, the August timeframe, it stopped here, which is between two to two and a half ATRs off the high. Stop there, stop there, stop there. So it's telling you that that was a time, that's where it liked to stop. Broke that character here, broke that character here. That's where you would be more concerned. But then again, it started doing it, stopping there around two and a half there in mid-December. Broke it a little bit more over here on the bad Tuesday, on the gap down. But then again, this time actually stopped at two ATRs. So that's telling you from this lens, it's healthier than all these other pullbacks.

1:11:19That's assuming this is as low as it gets, but that's the way of looking at this. And again, it's just price-based, another way of slicing the price. Here's the NASDAQ. This one's a little bit more all over the place, but this one in each chart, each stock or index is going to have a different level where it likes to get support. This one is closer to four ATRs where it gets support. So about three and a half ATRs, let's call it. So it did that here in August of last year, again in August, again in October, a little bit worse in November, but stopped there again in December, stopped there again earlier this year.

1:12:00So this is telling us we actually have a long way to come down here because we're at just over two ATRs. it could get almost to four ATRs and still be normal with itself. That's a problem from that lens. And then here's the IWM. This is about as low as this should get for this one, because that's where it stopped here earlier this year. So if it's going to keep this character, then it should stop around there. So now that I've thoroughly confused everybody, buddy, let me just kind of circle back to this. Why do we go through all these charts? We go through them so you have a set routine. You don't have to use these charts.

1:12:42Find charts for yourself that you trust and that you understand the tools and do them every day or every week and let it paint a picture for you and say, okay, they're not always going to be all good. You take a little good here, a little bad here, and then you look at what is it really telling you? And what that information was telling me the way we were slicing it, it really wasn't as bad as how I felt today. And, you know, I was seeing a lot of red on the screen and, you know, seeing that silver and the gold and all those things getting just demolished really concerned me. But then when I look at this go, at least at this point, it's still normal and natural and it's not really breaking in any big way.

1:13:26We did see that NASDAQ could come down a bit more and still be okay with the off-high thing. But as far as the regression area, that's where we want a bounce on IWM. And I still look at IWM as the leading index until proven otherwise, even though it's been weak the last several days. it's still the leading index until it's not. And that would be like a breakdown of it. We've seen that many times over the last number of years. It looks good until it doesn't. So I would say still be cautious next week. Look at these levels. I would watch that part again and see if you get it. But just create your own charts, your own way, do your own thing.

1:14:15And I hope this ends up helping. And it was so much fun doing stuff with you, Ed. Yeah. And I'll just add on that is that all these things, it feels like sort of the margin for error in a lot of the charts you showed is going away. It's like if it goes any lower, then you can turn. I think you can see that on the moving averages on the major indexes. Like if the NASDAQ goes below its 50-day line, you know, it's sort of like it's there. I mean, we could bounce here and everything looks – and everybody's, oh, okay, everything's great. You know, like, you know, of course we were going to find support there, but you don't know that right now.

1:14:44Or the S &P falls below the 21-day line and goes through the 50-day. all of a sudden, boy, you were really starting to get in trouble. On the flip side, it could easily bounce. So it feels like, and it's not surprising, often you'll see indicators show somewhat similar things. They're going to show a similar, you know, kind of picture. Like I know some people are like, I like to look at how many new highs, you know, are on the market every day, or how many, it's like, or the net new highs. Well, that tends to show things. Let me say something about the net new highs, because that's an important topic that so many people look at and so many people get wrong, frankly.

1:15:18So Bill and I, Bill, the founder of IBD, and I did a lot of work on new highs and we did it in a way of by sector. And we did some stuff in the paper that I know you're aware of that people should look at the paper. We still have the eIBD and stuff or get the weekend print. And when you look at them, the way he liked to look at it, the way both of us like to look at it is by sector, which one has the most number of new highs. So we started doing it that way and saying, okay, here are all the chips. How many new highs? Here are all the retail. How many new highs? Not by industry group, but by IBD's broad sectors, which was an idea that Bill had.

1:16:03So we looked at that a lot. And then I started building some stuff internally based off of that. And then it ran into some problems. And the problem was some areas have a lot of stocks and some don't. And so when you look at the number, let's say it's an autos. Well, you've got, you know, let's call it a dozen autos versus biotechs. And you've got hundreds and hundreds of biotechs. So when you look at the numbers, it throws you off. So you really want to look at it by percent of sector and look at it a little bit deeper, but it is meaningful, but you can get things that are really distorted. And so it's, and if you get a group that's coming on, let's say the bios are coming on, because that's like the broadest, you know, group by number.

1:16:53And if you get a lot of those going, your overall new highs are going to be really, you know, a large number of them. Whereas if it's just like, the mega caps that are going, well, there's just a handful of those hitting new highs. So probably a better way to slice it would be by market cap new highs. But it is valuable, but you always want to look deeper into the data because, and that's why I only use price. That's it. I have studied everything. I really have. And Bill had me study so many things, but I only use price. It's the only thing that you, it is unquestionable. You know, if you do a bull bear sentiment survey or something like that, well, it's different people every time.

1:17:38And, you know, it's every year, it's different groups of people. And so that's problematic. Put to call, it did a big study on that. That has got issues. Like there's nobody's business. VIX is different now than it used to be. Like all these secondary indicators can throw you off. So I know looking at all those charts, which sounds like a lot, But it's really, you're just looking at the same data series sliced differently. I didn't mean to interrupt, but it was something that I don't know. No, no, no. That was good. I was finished, and that's always great. It's always great. I'm getting more from you.

1:18:11But I think I will wrap it up. I had a lot of fun talking with you and listening to you. And I hope everyone else did, too. And, you know, this show will be up, you know, on YouTube. It'll be in a lot of things there. I hope everyone comes back on Monday. We'll have the stock market today. We'll have IVD live. It's probably going to be another very busy week. So with that, thank you very much. And I hope everyone has a great weekend.

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