Stocks Slump As Oil Jumps; Apple, Canadian Natural Resources, Ero Copper In Focus | Stock Market Today

0:00There's a lot of hype and a lot of good news already priced into the marketplace today.

0:03Ed Carson:We're entering a period of so much more change that it could be a tailwind for active management. Women are now in the protagonist seat for the family's financial story. I'm Joe Davis. And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an eight-part video podcast series hosted by Custom Content from WSJ and Vanguard. All investing is subject to risk, including possible loss of principal. This content was created by Custom Content from WSJ, a unit of the Wall Street Journal Advertising Department.

0:42Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, September 1st. It's Alyssa Koram and Ed Carson here and some notable selling in the market today, Ed. and we have more key earnings this week, but definitely not a good look for a lot of charts out there given today's action. Yeah, a lot of negative action. I do want to take a look at a couple of names that look pretty good. Apple and Canadian Natural Resources, but Eurocopper is one of the negatives. So some bright spots and a lesson that you're always so good at bringing to our attention. So we will definitely take a look at those stocks and a lot of ETFs and earnings out after the close.

1:26Ed Carson:So a tall order. I think we'll be able to get through it with ease, Ed. So let's kick things off with a look at the major indexes. The NASDAQ today down 1 % by Sessions close. Small caps, however, were hit the hardest today. Look at this. Russell 2000 down 1.3 % on the day. Now three closes in a row below that key 50-day moving average. We haven't seen this in quite a while for the Russell Ed. What is to blame? Well, your answer is right here with interest rates. We'll get more thoughts from you on that momentarily. The S &P 500 down 7 tenths of a percent today. We'll talk about key levels there.

2:08Ed Carson:And blue chips down 8 tenths of a percent closing below the 50-day line for the first time in this move over the last couple of months, so some notable damage there. Why don't we start with small caps and the interest rate situation, Ed? Yeah, small caps getting hit. Again, that's just well below when you're getting near, you know, recent lows when the market sort of, here's the bottom here. Small caps had held up better than a lot, but this is now coming down quite a bit. It pulled back a little while, you know, just a few days ago, you could have said, okay, it's setting up one good day and all these things will look good.

2:46Well, we've had three bad days, as you say, like not a good sign of RS lines, you know, which really peaked a few months ago. Now is, you know, getting further down. Yields are obviously pressuring that. And crude oil was a huge factor. I mean, the treasury yields weren't doing a whole lot today, but oil went up 5%. And that's the highest settlement, you know, in, you know, quite a bit there. So, and the 10-year treasury yield, you know, not only is that a 19-month high for the 10-year, if you go back and back and back, I think it's the highest settlement even longer, like maybe because we went over.

3:24So it's been a long time since that's been any higher, settled higher. So yeah, those are putting pressure on things. And it's one thing if you have this 50%, 100 % growth, well, maybe you can borrow. It's not big. It's all worthwhile. But if you're a cyclical company with smaller growth or you're a home would-be homeowner, you know, these interest rates are really, you know, much more of a squeeze, and it's just a real pressure on things.

3:51Ed Carson:It sure is. So a little bit of a domino effect there, or a correlation with the rising oil prices. We've seen a lot of energy stocks in FocusEd. Ed, let's go to our two main major indexes that we base a lot of our broader portfolio management decision making off of. So here's another look at the S &P 500. We are back below the low from the powerful day on 8-4, as well as a close below the 21-day line. And that's a key level for active investors, Ed. So still above the 50-day, but some notable deterioration here. Yeah, we're back to the top of the prior base. You could, oh, maybe we'll find support there.

4:44Okay, fine, you know, maybe. But this is the best-looking index, all right? And it doesn't look so good. And that's what I mean. If this was the worst index, then it'd be like, oh, okay. But this is the best. And it's also every time we've had strength, okay? you know about three weeks ago it popped out to new highs just peaked out looked like okay and there's a lot of things that a lot of handles other indexes showed similar action and then immediately turned over then uh last thursday it peaked out again and just sort of trend tried to do that on friday and then traversed lower so again it's not just that the indexes are down but you'll see what the sector rotation that we've had individual stocks the moment you get in it seems like that's when everything falls off or you have to be so quick if you're not buying right there and then taking profits and exiting losers immediately, you can get chopped up even much more than the indexes moves would suggest, I think.

5:36Ed Carson:Exactly. Yeah. So being careful about buying strength, looking for the pullback. So what I'm trying to do is reframe my mindset and think about, okay, how will this next pullback to the 50-day look like? And whether it's at the index level or individual stocks, we always talk about how much of a test that is and very critical because it's not a lock that the indexes or individual stocks will get support at or around that level. Because if you do break, that could be the beginning of the end, or at least for, you know, a period of sitting out. But I think if we do potentially have this precedent still intact with the late 1990s of a choppy market with an upward bias, really thinking about these pullbacks in that context.

6:30Ed Carson:But of course, we have maybe some echoes of that, but you have a whole host of other factors of today that we have to think about, right? Whether it is the Mideast tensions or what's going on with AI CapEx spending or so many of these other factors that investors have to contend with today. Yeah. I mean, there's always those things. And look, if crude oil plunges back to recent levels, I mean, it's had this big run over the last month. Crude oil falls back to where we were a month ago. Chances are, you know, these indexes and all these stocks will see an upward trend. So yeah. And these headwinds could change very, very quickly to tailwinds.

7:13That just adds to it. And it'd be nice if you could have, even just we could have sector rotation that lasts. Instead, it feels like we just sort of go up. It's more like whack-a-mole where something pops up and then it gets whacked down. And it's just hard to get a foothold in things. So yeah, it's just a tricky market. And probably investors should be thinking a little bit more defensively. Even if they're not trying to cut exposure, they may be cutting exposure because some things that they bought recently, they're selling. And I don't think on a day like today, yeah, I guess you could have bought.

7:42There's a couple of sites you could have bought, okay? But it wasn't really a day to be thinking, boy, I'd like to be adding exposure, that's for sure.

7:49Ed Carson:Yeah. I mean, it would have been a different situation if we had a stronger close because going to the NASDAQ, there was a time where it was looking like we were getting support a day high here, you know, looking kind of interesting. But we did get a pretty weak close, still holding on for now above 26 ,000, above the 50-day line, but we are now back below the follow-through day. We're back below some of these marked highs. So once again, kind of hanging on by a thread. I think it'll be interesting to see if we do take out the low from 824. That would be a lower low in the short term. What are your thoughts, ed on levels to watch for the nasdaq composite yeah i'd say those lows i mean that there's a lot of things lining up the 50 day 26 000 that recent low they're all pretty close uh also note it was nice that the nasdaq did hold the 50 day but it's interesting that the nasdaq 100 and qqqe they did not and they sort of closed near session lows and they were never really preference so again it's just you know it just sort of everything just sort of struggling you You know, when you can look at, oh, well, the S &P is only below its 21-day line.

9:05The NASDAQ held its 50-day line. Those are the best-looking things. Everything else looks worse. And those two indexes don't look good either, really. So, yeah, that's just where we are.

9:16Ed Carson:And what else that we saw that didn't look good today? RSP, this was one of the bright spots that we kept pointing to, right? Well, hey, if breadth is still holding up, maybe it's just a matter of where you're looking in the market. but now seeing a notable trend lower here as well. Still holding above the 50-day line, but today's decline of 0.8%. Now two closes in a row below the 21-day line. We've also been talking internally about a line of best fit. Obviously, I don't have the math. This is just eyeballing it, right? But if we're coming down to a lower regression channel, ed, you know, there's concern that we're going to be falling out of this regression channel.

10:07Ed Carson:So something to think about there. It's going to be a key couple of trading days to see, hey, can we find support or will this trend really continue to meaningfully change? I agree. And when you think of IWM and RSP and some of that stuff, it's just not, we're not seeing breadth. So you can't just say, well, the mega taps don't look good. A lot of the chips don't look good. The software's all over the place back and forth. It's hard to find a spot that's really working except for energy and some things like that. But then again, that could be so short-lived. All you have to do is look at GLD or GDX, those kinds of things.

10:44And it's like, there were some places where if you bought really early, yeah, you could be up. Like if you bought when it was first bouncing up down low. But if you bought on the second time when it was bouncing clearly above the$200 line, well, you've lost those gains. I mean, that's gone. And if you bought last week, well, you were definitely down. You've lost a lot. And that's just the way this market has been. Things look strong and then it's like, then what? Can you hold it? So it's just a challenge. Mm-hmm.

11:19Ed Carson:Okay, so while we're looking at gold and the gold miners, let's also take a look at copper. We will be looking at ERO, of course, here in a little bit, but here's the Copper Index Fund, CPER, down 2.3 % on the day, coming back down to a test of the 50-day line. What's going on here, Ed? I mean, you were just seeing a shift to higher yields and the higher dollar. those factors are you know hitting dollar valued commodities not oil which is dollar value but that's other things going on but the metals that were really moving that so again you bought this or some other names in the last few weeks you're down I mean they look strong but you just have to be so nimble I mean I know I'm a broken record so you have to be nimble well I'm not a super nimble I've been trying to stay more in cash not make a lot of moves because I don't really do great in this environment.

12:12Again, I like uptrends that trend up. We're just having these short-term levels, and you buy strength, even initial strength, and it's hard to make money. It's one thing, oh, I'm going to wait for the breakout or new highs. But even that first day pop, even that can be hard to make money on unless you are really, really quick about getting out.

12:34Ed Carson:It's been that kind of market. Okay, and you mentioned energy. So let's go there. Here's a look at XLE continuing to show that leadership, Ed. Yeah, it looks really good. And there's a lot of stocks in this area that are working well. And some are really extended. Some are flashing buy signals sort of like XLE. It's just tricky. There's an argument for something like an XLE or an OIH that may have a lower ATR. Don't get me wrong. Oil prices fall and stuff. They're going to get hit, but you may not have the same kind of downdraft as with an individual name. But if you play this, you have to be very nimble as well, or just know what you're doing here, because it can just change on a word.

13:21It can just change on a word from things.

13:23Ed Carson:Yeah. And there are clearly ebbs and flows here too, right? So a time to be in. So looking very carefully at some of these chart patterns, some of these entry points, trying to catch the turns, because like you said, with all the rotations, if you're waiting too late to get into some of these trends, that could be just the time that you're seeing a rotation out of that. So then I think traders fall into a situation where they want to try to stick with something, And then you don't know if it's just going to kill your performance, right? Or if that patience is going to pay off. And, you know, you don't want to hold something that goes down too much because then that's a bigger hole that you have to climb out of.

14:14Ed Carson:So a lot of timing involved. President Trump in particular, it seems like, oh, if the futures are really bad on the weekend or if, you know, if you can imagine the NASDAQ and the S &P, if they went through the 50-day line, You could imagine, you know, you start starting to see headlines. Hey, it looks like maybe talks are picking up again. I mean, I just and then and then if you're in oil, you can just see how that goes. It's just, yeah. The questions that matter most are about what happens next. Polymarket is the world's largest prediction market where you can trade on elections, the economy, finance, crypto, sports and more.

14:45Ed Carson:Download Polymarket. Use code W20 for a$20 bonus on your first trade. 18 plus trading involves risk of loss. Terms apply. Not available in all jurisdictions. Yeah, so we'll continue to be nimble there. Let's take a look at some of the technology areas like software. This is still in an uptrend, but today's hit 3.5%, quite sizable. I do have a small position in this from last weekend. We saw a lot of earnings-related momentum at that time, broadly, not only just the cybersecurity, but more of the enterprise software names. But it seems like we saw a lot of selling in the software sector today. Yeah.

15:30And so, again, if it's one thing to have already been in it, you're still fine. But if you bought on that gap up, you're probably down. Now, again, there's a lot of soft earnings this week, and some of them were positive. It may turn up again. So we'll see. I mean, it doesn't mean it's not finished or anything. It's certainly gone. But if you bought on that gap up on last Thursday, well, you know, you're down. I mean, it's just, you know, in almost all likelihood. So where you go from here, I don't know. I mean, again, that's just how the market is right now.

16:05Ed Carson:And we also want to take a look at HACC. This is one of the cybersecurity ETFs. So this was down even more. And one of the reasons why I went with the broader IGV, because it also has that cyber exposure, is I wanted to get a little bit broader with the exposure here versus going more narrow with cybersecurity. And you did have a larger decline with HAC today down 4.4%. But that can swing both ways, right? This could go up more than IGB, depending on how some of these stocks perform. And we do have Palo Alto earnings out after the close. So we'll circle back to take a look at that. So as of now, even with today's decline, our thesis of a potential ascending base is still holding.

16:58Ed Carson:So I would say as long as we hold above the lows from last week, it would still kind of have that look to it, although maybe a little bit jagged of a stair step there at the top, Ed. Yeah, again, it's just if you were able to hold on or if you did hold on, there's been a few chance to get in and you could be upsizably. And it's just like, okay, this is fine. I mean, okay, this is like those kind of days when you're down 4%, but you could see how that it's just where you're going. If you bought off the gap up, you're considerably down. I mean, because you're below even just the low of that day, you're down.

17:35You were up maybe a few percentage points and now you're down three. You don't necessarily have to sell, but it's just a different environment. Yeah, if you bought it earlier, then that's fine. But that's where things get tricky with this kind of environment.

17:49Ed Carson:Absolutely. And two more ETFs to look at for now. Here's a look at the biotech sector holding up. So showing that relative strength today up on the day by a little over half a percent head. Yeah. And so there was some wild action with Moderna, and that also lifted some other names. That's fine. So I'm a little more forgiving about XBI's wildness because of course it was going to fly. And of course, so that's not so much. I mean, a couple of names that I think look interesting that are setting up, it's tricky because it's like, well, I keep on saying you need to buy right away to get any chance of winning in this kind of market, but it's hard to pull that trigger.

18:28But EXEL are a couple of names. EXEL, and that almost got, I guess at the end of the close, basically got to those short-term highs. Earlier, it wasn't. it was sort of breaking a trend line and maybe tgtx which is like breaking a mini trend line it's just so tough it's just so tough where do you say it's strong enough enough of a rally because do you wait to get all the way up to the top again that again i just repeat myself it's just hard to get in any of these things but but there are definitely some biotech names that look

18:55Ed Carson:interesting yeah it seems like early entries managing uh not only the position size but where you're setting your stop is definitely key in this type of market. And like you said, the profit-taking strategy on the way up as well. Let's take a look at chips. Here's SMH, definitely weakening here, Ed, down 2 % on the day. So an outsized decline after that short setup that we were talking about, at least on IABD Live, but I'm pretty sure we talked about it on this show as well that weak rally up to the declining 50-day, and it has not been able to meaningfully recover since. It's really just been continuing to kind of bleed lower here.

19:47Yeah, and it's a good idea just to kind of look at short seller mindset because instead of getting so just a temporary enthusiasm, even if you don't want to buy, it's like, well, wait a second, doesn't this also look like a short setup? Sandus, which I don't know if is in SMH, but you can sort of see how that one briefly got above the 50-day line. But even if it had been like even a little stronger, they were short-term highs. But you can sort of see how, is this a short setup? I mean, a powerful move, and I can see why people would get excited and want to go long. But you can see right here, you know, maybe this because there's, you know, a lot of space from, especially, you know, if it fell below the 21-day line, that you can see there's a fair amount of space between that and the 200-day line, you know.

20:27So, you know, there's even the good stuff in this area just seems to be just not there. They're on the wrong side.

20:36Ed Carson:Okay, let's talk about a few individual names. Then we'll go to the earnings after the close. Apple, a day of notable outperformance here, Ed, up 2.6%. Are we now seeing the rotation back to Apple as sort of this flight to safety within tech today, at least? I can imagine that's part of it. It's like, well, chips aren't working software or isn't working today, maybe going to Apple. Yeah. Today also marks the official taking over of John Ternus, who had been the Apple's hardware chief, is now the CEO. Tim Cook stepped down after 15 years. I don't think that was a real mover on today. But yeah, so this cleared short-term high, just now decisively above the 50-day line.

21:20I think you could have played that. It's above those levels. So it just feels like it's clearing things. I mean, there was that gap down on earnings. So that's something to note. So you could do that. But this is a place where you could enter. Just know it is maybe a safe haven play. There is always that thing. The fundamentals have improved a little bit. So it's not quite the slow growth. The RS line has vaguely trended higher after vaguely trending lower for quite a while. So, you know, it's nice to see that. It does have a new base here on a weekly chart. So, yeah, I mean, if nothing, this could be at least a swing trade or at least see how that, you know, and if it works well, you could turn that a position trade.

22:01But, yeah, this one is just acting well. Close to the 10-week line, ATR of 2.1%.

22:08Ed Carson:So if you do want to play something in technology that has that outperformance, this could be an option worth considering. But yeah, that gap down on the daily chart makes the daily chart have a little bit of a notable blemish, I think, but things on the weekly chart are smoothed out a little bit there, perhaps a little bit wedgy, but we'll see if this can continue to show that outperformance. Let's go to CNQ. This was our stock of the day-to-day, Ed. Canadian Natural in the Oil and Gas Explorers Producers group. Look at this breakout. Yeah. I mean, it looks pretty almost classic to a certain extent.

22:55Nice action here. The earnings growth is really powerful. I mean, it's no surprise. These prices are much higher. Despite all the U.S.-Canada trade where this is an exporter to the U.S., I don't think they're talking about cutting off oil. because we need their oil. So a lot of refiners use Canadian oil. I don't know about specifically this company, how that works, but it's important. The RS line, it's not at a new high, but it's at the highest level in a while. It's above that handle high. So there's some improvement there. Yeah, the fundamentals look pretty good, at least right now. I mean, obviously, it's a reflection of price and things like that.

23:31Prices go down. The earnings are going to fall over time. but this is just looking pretty strong here pretty clear buy signal um you know and you know just a little bit safer on that front you know it is extended from the 50-day line but that pullback i mean i like i like this is why we like handles and pullbacks near the highs it just feels a little bit more rested after running running running uh so there were a number of energy stocks that sort of look like this today.