Stocks Retreat With Fed Minutes, New Year Right Around Corner; Reddit, Vita Coco, Eli Lilly In Focus

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0:24good afternoon everyone and welcome to stock market today for monday december 29th it's alexis garcia here and the major indexes fell today as investors sold holdings into this holiday shortened week that will cap off 2025 trade. NVIDIA and Tesla led the retreat, and there was a lot of volatility with the precious metals trades. That group has rallied to recent highs lately, but hitting some turbulence here as we finish out the new year. So here with me to help break down everything you need to know about today's stock market is IBD Markets Research director Justin Nielsen. So Justin, what's going on?

1:09What day is it? What's happening?

1:12Alexis Garcia:Yeah, it seemed like there was a little bit of a hangover, even though we haven't had New Year's Eve yet. So I don't know if that was in anticipation. But yeah, especially as you said, the precious metals just really got slammed at the open. A lot of things did finish off their lows, but we'll cover a few things today that were looking decent, including Reddit, Vida Coco, and Eli Lilly. I do have a position in Eli Lilly. All right, well, we'll get to those individual names, but let's just check in quickly on the major indexes. The S &P 500 finishing the day down three-tenths of a percent, the NASDAQ down half a percent, the Dow down four-tenths of a percent, and small caps down six-tenths of a percent.

1:55So I'm going to get my charts up here, Justin, but, you know, we saw some solid gains last week during the Christmas holiday week. But you can see the S &P here edging slightly lower today. So thoughts on the market. And again, we're it's a holiday week. It's still be business as usual on Wednesday, New Year's Eve, a regular day of trading on January 2nd of the day after New Year's. But, you know, there's still a lot of news coming this week. We've got Fed minutes. We've got potential Tesla Q4 deliveries coming up. So holiday week, but no rest for the wicked out here, huh?

2:32Alexis Garcia:Yeah. And on the technical side, you know, what we had is last week, as you said, very strong, something that Ed and I covered on the Friday SMT. And we broke out to highs for the S &P 500. And again, one of the things that started the week off on Monday was that both the NASDAQ composite and S &P 500 got their lows above the 21-day moving average line and also the 50-day moving average line. So that was a good thing that happened. Now, maybe there's some resistance, right? Sometimes you hit those high levels and you don't immediately continue and follow on through that area. You just kind of rest a little bit.

3:14Alexis Garcia:And this is where the handles get formed on cups with handles or even double bottoms with handles sometimes. And we're maybe seeing that with some of the stocks, too, that maybe came up a little bit quickly and now are taking a little bit of a break. And that would actually be constructive action. So while it's no fun to sit through some of that turbulence, it's in the end, maybe not such a bad thing. But of course, that does presume that we do this little retreat and then blast through those resistance areas. If that retreat just continues and we start falling below the 21-day moving average line, below the 50-day moving average line, especially if we undercut the lows of a couple weeks ago where we really kind of started getting some distance below the 50-day moving average line, that's going to give a different look.

4:05Alexis Garcia:Right now, we have higher highs potentially and higher lows, but if you start making lower lows, then that does suggest potentially a change in trend. And we're switched over to the NASDAQ here, Justin. And again, down about half a percent today, but still holding above those key moving averages. Anything to add here? Well, again, we did come off lows. So the NASDAQ composite was down about eight-tenths of a percent. So in terms of the trading range today, it was in the upper half, But a lot of times we do take a look at it in terms of the true range, which means that instead of using today's high, we use the maximum of either today's high or Friday's close.

4:50Alexis Garcia:And if you use that closing range, it was more of a 39 percent closing range using the true range. So, again, not a great look. But, again, you could take a, you know, take some heartening in that we did close off the lows instead of right at the lows. And it's still pretty, pretty small spread here. You know, so that's also not as not as directional, you know, either way, you know, if it were an up day and it was that tight of a spread, we wouldn't be making too big of a deal of it. It being down today with that tight of a spread, not so much of a big deal. And just let's quickly check in on the Dow.

5:28Justin, again, this one down today, I think Apple, Nike, NVIDIA, I think were big components of this move. of this one closing in the lower part of its trading range. But again, still holding up fairly well and not so far off these all time highs. Yeah.

5:45Alexis Garcia:And I think that's the big thing right now is it's hard to be too bearish when we're so close to highs. You could just see, you know, one strong day kind of putting us over the edge on breaking out to highs in a lot of cases. But yes, the Dow Jones Industrials did close in the lower part of the range, the lower quartile, really, as opposed to the S &P 500 and NASDAQ composite. And then if we just kind of finish off with a look at the Russell 2000, that also closed pretty low in its range. That was kind of the worst off having a six tenths of a percent decline. And, you know, it wasn't down much more than that, but it never really.

6:24Alexis Garcia:Yeah, it was pretty much close to the lows. It was down about three quarters of a percent at its worst and closing more like in the 14 percent, 13 percent closing range today. And it looks like it's just right at this 21 day line as well. So we'll keep an eye on that level. And in terms of market breadth, Justin, let's just quickly look at RSP. Again, this one edging down slightly today, about two tenths of a percent, but still, you know, trading tightly within here. So any thoughts about market participation? You know, it's a little impressive to me because for a while there, it seemed like RSP, this equal weighted S &P 500 and the Russell 2000 small cap index were kind of marching in unison together.

7:06Alexis Garcia:You know, whenever they had strong days, they were kind of doing that together. But lately, there's been a little bit of a divergence, whereas the Russell 2000 has been coming in a little bit more. The RSP has been holding up really nicely. So this is something that it's worth taking a look at. And again, when you have the average stock, that's doing pretty good. And when I say average stock, I mean the average of the top 500 in the nation. So when those are doing pretty good, I think that that does speak highly of a strong market. And while there might be some of this sector rotation under the surface, that can be very frustrating for your portfolio.

7:46Alexis Garcia:Because again, you know, some people are saying, hey, it was not a bad day at all for me. Other people, you had exposure to gold. Yeah, it was silver. It wasn't a great day, right? So it really becomes a stock picker's market. And, you know, your results vary considerably depending on what stocks you have in your portfolio. But the RSP, it does kind of show, hey, a lot of stocks are holding up pretty nicely. Right. Let's take a look at some sectors, starting with SMH, Justin. That's the semiconductor ETF. This went down about half a percent today. And I'm assuming NVIDIA part of that move, this one down at 1.2 % today, Justin.

8:26But any thoughts on chips here?

8:29Alexis Garcia:You know, they're holding up. I mean, it's still, you're above your 21-day moving average line, you're above your 50-day moving average line. And in addition to NVIDIA, you have some of the semiconductor equipment makers that are looking strong. We've been, you know, keeping tabs on like KLAC, LRCX. And while they have down days today, they're still well above their 21-day moving average lines. So, again, like, you know, with KLA here, you're right up there at the highs. Maybe this is where you tack on a handle there. So it would potentially give people another chance to get into some of these names that have been actually, you know, trending very nicely above their 50-day moving average lines for the last month.

9:11Let's just take a look at XLY. why that's the consumer discretionary select spider ETF. This one down about a percent today. And Justin, I'm assuming Tesla here, a big part of that. This down about 3.3 percent, breaking below the 21 day line. But any thoughts here with XLY?

9:30Alexis Garcia:Yeah, in terms of your 11 sector spider funds, this one was down the most being down a percent. And yes, Tesla, Tesla and Amazon together probably make up about 40 percent of this. So Tesla, with its move down and back below the 21 day moving average line, certainly weighed on this. But Amazon, you know, not as much. That was pretty much flat. So if you also look at RSPD, that's the equal weighted of the consumer discretionary sector ETF. So same exact components. It's just they're equal weighted instead of having that heavy weight on Amazon and Tesla. And you can see that this wasn't down nearly as much, about half as much as XLY.

10:13Alexis Garcia:So the average discretionary stock, consumer discretionary stock wasn't hit as hard, but Tesla definitely overweight in the XLY and that was taking a harder hit. Well, let's look at energy with XLE. This one up about 1 % today and again, getting right to this conjoined 50 and 21 day line. Yeah, so it's been a little bit tough because there's, you know, been news kind of throwing things back and forth and energy, oil and gas. Tough, tough anyway to make headway sometimes unless it starts trending. And we just haven't had that for a while. But if you are going to start somewhere, one of the places to start is when you start crossing that 50 day moving average line.

10:55Alexis Garcia:And so that's right about where the energy sector ETF is. And this is another one that's very heavily weighted with Chevron and Exxon, both containing about a 40 percent weight for XLE. So, you know, that's something to just keep in mind. But you can also look at RSPG. That's the equal weighted and the equal weighted energy sector is is right there. It's right at the 50 day moving average line conjoined 21 and 50 day, as you mentioned, with XLE. So it's in kind of a similar position. But again, if we can get above that, those lines, that might be the start of something. But we really want to see this trend.

11:33Alexis Garcia:And we just haven't seen that yet. All right, let's hop on over to XLV. That's the Healthcare Select Spider ETF. This went down about two tenths of a percent today, Justin. But there are a lot of biotech names out there that were swinging around today. So thoughts here. Yeah, so, you know, XBI and XLV both were down, as you mentioned. But look, it's a big area. The biotech area has got 700, 800 names. A lot of them are development stage. But, you know, sometimes you get news out there. You know, we were looking at a few on IBD Live today. You know, good news coming out in terms of some of the clinical trials, approvals, things like that.

12:16Alexis Garcia:But it's almost like earnings seasons are always around the corner for some of these stocks because news that can really have big, big effects on there, you know, are always around the corner. So interesting. Again, this is an area that has continued to hold up strong. And of course, we will take a look at medical stock when we cover some stocks today. Yeah, we'll take a look at Eli Lilly. But first, let's check in on gold, because as we mentioned, a tough day for precious metals. This down 4.4 % today. That's the GLD, Spider Gold Shares ETF, breaking back below this 403.30 buy point, Justin, and below this round 400 level.

13:00Alexis Garcia:Yeah, it was it was absolutely a tough day. And not just with gold. I mean, if we take a look at SLV, the silver, arguably that was hit even harder. It had been going up a lot more. You know, you can kind of see this looked a little climactic here. Now, we've been kind of alerting folks to the fact that in the October area where SLV had this very parabolic move and was looking parabolic to 49.25, that was a little bit too soon for it to be a climax. But we did consolidate here. And another move here looking a little bit more climactic. And so it did close off of its lows. You know, it was down a lot more, especially at the open.

13:46Alexis Garcia:I mean, I think was down almost a full 10%. So nice that it closed off the lows, but certainly a lot of damage done today. And another area that was hard hit, platinum. You can look at PLTM, which is the Granite Shares Platinum Fund. That was also hit hard, down almost 13%. Not as far off its lows today. And even, you know, CPER, copper, you know, that metal was getting hit, you know, in a big way, down four and a half percent. So affecting, you know, stocks like SCCO and FCX in the in the copper space. So, yeah, take your pick. A lot of the metals were were not doing not doing well today. In a new episode of TechFluential, Deloitte's Ludi Lorenzo talks with Gabriella Ricci, Chief Data and Technology Officer at Takeda, and Karen Antarell, board member and former Chief Digital and Technology Officer across industries on the role leaders play in operationalizing AI at scale, moving from experimentation to accountability.

14:47They discuss how leaders can embed AI into core operations and measure success by outcomes instead of pilots. Where technology and influence converge, new opportunities can emerge. That's TechFluential, a podcast from Deloitte and custom content from WSJ. Well, let's move on to some individual stocks, Justin, and maybe Reddit was doing a little bit better today. That's ticker RDDT. This up almost 4%, Justin, looking like it's breaking this downtrend within the handle here and bouncing off that 21-day line.

15:18Alexis Garcia:Yeah, so this is a setup that we've been keeping our eye on. It looks like they're going to be going from losses and into a profitable territory. So you can see some very big estimates for 2025 and 2026. Some really stellar growth in terms of earnings and revenue for the last quarter. So a nice, nice fundamental picture here. And as you mentioned, a good technical side here to handle formed here. And whereas a lot of things were getting hit hard today. this was breaking the downtrend of a handle. So I would argue potentially an early entry. Now, the one caveat and warning sign I would have here is that there are a lot of these days where you have been seeing kind of these downside reversals.

16:00Alexis Garcia:We saw that to start this handle. So right where you have the left hand side there. Yeah, that wasn't a great look as you broke out into new, not new high ground, but broke out above resistance and couldn't hold it. And look at what happened when it topped back in 282.95. It was another one of those downside reversals. You saw that again at 230.97, kind of in the middle, if you consider this a double bottom, right in the middle there. So, you know, it does have that habit of hitting resistance and getting turned away. But if it can hold that resistance and build on it and start trending, this is a stock that is set up when a lot of things are still baking, if you will.

16:46All right, let's take a look at Ticker Coco. That's Vito Coco. They make coconut oil, milk, water, all sorts of fun products to hydrate you, which could be useful this week. I don't know. This went up 1.8 % today, Justin. Again, just shy of some of these highs here around 55-29. So what are your thoughts here?

17:07Alexis Garcia:Well, look at how many of these days have just had tremendous amount of volume. Now, this is on the thinner side. It, you know, it trades just under a million shares a day and it's a$54 stock. But you see a lot of these spikes on the blue side. So that does suggest buying demand. And I also like to look at the weekly chart. If we flip over there, you had this really strong move and the stock just isn't giving any of that away. It's just really holding nice and tight up there. It's, you know, at a certain point, you would kind of be a little concerned, you know, trying to buy it up here because it's like, oh, wow, it's really extended from its 10 week moving average line or the 50 day moving average line.

17:50Alexis Garcia:If you were looking at that chart and it still is, but you can see that that line is very quickly coming up to it. So you could see that because it's kind of taking this break here, maybe even forming a flat base potentially, but it's been real nice and tight, not giving up any of those gains. And you could easily see the 10-week moving average line and 50-day moving average line catching up to it. You know, the 21-day moving average line already has to a large degree. so that does give you a little bit of a better way to manage your risk even right now you kind of have the low as it crossed below the 21 day moving average line as an area where look if it falls through that you would know you're wrong so you're already in a position where you can manage risk a little bit better as opposed to a few weeks ago where it's sticking straight up in the air and it's like okay well how far down could this go before it got support and that that just again makes it a lot tougher to manage that risk.

18:45Alexis Garcia:Now you have some levels and you could potentially be seeing another one here with Friday's low. But yeah, let's look for that 55-29 breakout above that area. It would be okay if it doodles around here a little bit longer along with the market, especially one of the things we've been talking about is the first week of January sometimes can be a little volatile as you get some folks that had a good year and they want to push off their tax burden to the 2026 tax year instead of 2025. So there could be some extra volatility here in the first week of January. And so if this just kind of sticks around here and then pops up, that's something that is worth taking a look at.

19:30Alexis Garcia:So the bottom line is now's the time to do your homework. And this can be, you know, getting your watch list ready for, you know, as soon as January hits, if some of these stocks start looking good and the market starts looking better and breaking above those resistance areas. Yeah, make sure you have your list ready. All right. Well, we'll be watching that 5529 level here, Justin, or seeing if it sets up in that flat base. Let's wrap up with Eli Lilly. That's ticker LLY. This one pretty much flat today, Justin. But again, we've seen some nice action. It's really made some gains after hitting this recent low here of 977.12 and really holding it, I think, on the weekly chart you can see, it's just really tightened up here over the last few weeks.

20:13So any thoughts here with Eli Lilly?

20:16Alexis Garcia:Yeah, again, I do have a position in this myself. A lot of time that it's spent underneath the 40 week moving average line. Remember, the weight loss, you know, drugs, NBO and Eli Lilly especially kind of took things by storm. Really strong move since 2023. And yeah, I was due for a break and it took a real long break here. But now as it got above that 40 week moving average line and then had one last consolidation right around 800 and really popped strongly out of that, it's been really looking a lot better. And even this last pullback, while it wasn't fun going back to the daily. I'll be honest, I, I lost, I lost my nerve.

20:58Alexis Garcia:I had a lot of gains here. Yeah, yeah, I was. And it wasn't that it was so sharp. It was just like so persistent day after day after day. It felt like a death by a thousand cuts, you know, because none of them were down necessarily that much, but it was just so persistent. And so I did buy back as this cross back above the 21 day moving average line. And now, again, it's acting, you know, fairly, fairly well, tightening up here. And on a day where so many things were down, being up or flat even is that's relative strength right there. So it's good to see that this one was holding up well. And yeah, this could be an area where you could get an early entry before it hits that 1100.

21:42Alexis Garcia:You know, it's not your typical, But I do also like exactly where it got that support right at the top of that base when it came down to 977. It was right at the top of the previous base. And so, so far, it's acting very constructively. And I do like how it's tightening up lately. All right, Justin. Well, thank you so much for your insights today. I know, again, it's a short week, but I just want to toss out. We do have Jim Ropel coming by next week to give his monthly market report. So I know you and Jim will be breaking down a lot of this come next week. Yeah, and he already shared some really interesting statistics on that first week of January.

22:23Alexis Garcia:And he gave credit to Josh Darwin for that. But yeah, it'll be interesting to see how we'll be in our second trading day of the year. So we'll see how things start out. And we'll probably get some ideas of the things he's keeping an eye on. So can't wait for it. And then also, I should mention our very own Hat Man is going to be on the podcast this week. So we're going to do that a little bit early instead of doing it on Wednesday, as we typically do. I mean, does anyone really want to hang out and spend their New Year's Eve with us? Probably not. So we're going to do that. I can't imagine why they wouldn't.

22:55Alexis Garcia:We're going to do that Tuesday. So we'll be live at 5 tomorrow. All right. Well, we'll be watching. 5 p.m. Eastern. 5 p.m. Eastern for the podcast tomorrow. Monthly Market Report will be next week on Monday at 5 p.m. Eastern. So mark your schedules. come back to it. But Justin, thank you so much. That's it for us today. We'll be back with more market analysis tomorrow morning, starting with IBD Live. You can get all the details over at investors.com slash IBD Live. And we'll see you all right back here tomorrow after the close.

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