Stocks Surge After Fed, Led By Chips; Lam Research, TD, AMP In Focus

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0:40Ken Shreve:good afternoon everyone and welcome to stock market today for thursday july 30th at solicitor along with ken shreve we've got a look at the action in today's session with day one of a rally attempt a new rally underway and more key earnings out after the close ken what do you have for us Yeah, one of the stronger first day of a rally attempts for the NASDAQ that I've seen in a little while. Breath, not that great, but we'll talk all about it. Allie, good day for the market here. And yeah, we'll talk about a nice earnings report that got things off to a good start today. Well, we had a good report from Microsoft and also from LAM Research.

1:22That's what really fueled a nice rally for semiconductor stocks today. So Lamb Research and then Financial Stocks, really, really strong performance today. So I have two of them, Toronto Dominion Bank, otherwise known as TD Bank, and also Ameriprise Financial Asset Manager AMP.

1:41Ken Shreve:All right. Sounds like a plan. We'll get to those stocks. But first, a closer look at the major indexes. Here's the S &P 500, up 1.7 % on the day. Meanwhile, the Dow up 1.2%, bouncing off of the 50-day line. The Russell 2000 hanging on right at its 50-day line, up 1.4 % for the day. A big day for tech, which has been badly beaten down, Ken. But the biggest snapbacks today in the tech area with the Nasdaq Composite up 2.8 % on the day. And the Nasdaq 100, you mentioned that Microsoft report. The NASDAQ 100 up some 3.4 % on the day, snapping quite the losing streak here. Yes, yes, indeed. And I think if you looked at any oversold indicator for the NASDAQ 100, even the composite, you're probably seeing oversold indicators that were screaming, oversold, oversold, oversold.

2:47And so we got an oversold bounce today. And, you know, when you look at the queues here, the fact that, you know, we were able to get close to that, I think that's the 10-day moving average on your daily chart here. I think I've got an 8 EMA. Oh, the 8-day moving average. So, you know, you had a move back up after several down days in a row for the queues here. And I didn't quite recover that 8-day moving average. But, you know, it's trying to – what I see here is, you know, an index that is – well, in the very early stages of a rally attempt here, an index that is, you know, going to try to overcome a lot of overhead supply.

3:33It's going to try to overcome a lot of overhead resistance here. And, you know, it's still, you know, still a damaged index. And, you know, we probably had a day of short covering today. And when you're in the early stages of a rally attempt, you know, the first day, the second day, you know, we want to let this short covering, you know, run its course. And then, you know, you want to kind of pay attention to, you know, several days after a rally attempt and kind of let that short covering run its course. And then you have a better idea if this rally is going to, you know, have some have some have some legs here.

4:10So it's encouraging to see a nice strong update for the market. But when you look at a lot of the individual stocks that move today, even the beaten down semiconductor stocks, you know, not much repair work was done today in terms of the technical damage that was done. So, you know, in terms of the leaderboard model portfolio that Dave and I managed, there wasn't much, you know, buying that was done today. day. We just kind of watched from the sidelines and didn't see much technical repair that was done today. So we were encouraged to see the first day of a rally attempt. Tomorrow, if we rally again, we're probably just going to see a little more short covering.

4:52But as the rally progresses here, we're going to start to see more repair damage or more repair work done. And as this process takes shape, you know, we might feel more comfortable about things here. But we're still early here and we'll just kind of watch how things shape up.

5:15Ken Shreve:Exactly. As you said, very early, a lot of cross currents to look at and we'll see as things progress if this is just a short-term countertrend bounce or if something that will lead to more on the upside. We are on watch for a potential follow-through day that can happen at the earliest on day four of a new rally attempt. We also have that green line, the 21-day line, conquering that as part of our trend change checklist. It is nice to see the Nasdaq composite back above that$25 ,000 level. And I think also something to point out about tech or the AI trade is one factor potentially at play here is the unwinding of the Leopold Ashenbrenner situational awareness AI trades, right?

6:06Ken Shreve:So just a little nugget there. I know a lot of traders in our audience have been interested in that angle on things too. Yeah, no doubt about it. You guys were talking about that on IBD Live this morning, and that was certainly a big, big, excuse me, a big, big headline as well that was certainly certainly had a lot of attention earlier in the session as well, no doubt about it. I think the reclaiming of the$25 ,000 level that you mentioned as well, that was a noteworthy accomplishment for the composite as well. That's a big round number, I think, that the NASDAQ achieved today as well. I think the breadth today, Ali, we've been complaining about the breadth a lot.

6:56It was really miserable today and maybe not a surprise. It seems like the breadth is something that has been missing a lot lately. I mean, to see the S &P 500 up as much as it was today. And we were kind of waiting for a weak close, and we didn't get it today. It was actually a pretty good close for the market today. But to see the S &P close up near its high and to see RSP close down, you know, for the day, I mean, pretty, pretty, pretty, pretty poor breadth, you know. And the NASDAQ 100, what was the gain for the NASDAQ 100? North of 3 % today. And QQQE, I think, is our sort of, yeah, that was up 1%.

7:451%.

7:46Ken Shreve:So, yeah. And, you know, even the NASDAQ composite, I was just looking at NASDAQ breadth overall, you know, today, it was less than 2 to 1. So, you know, not great. You know, on a big, strong update for the NASDAQ, you'd like to see breadth 3 to 1, 4 to 1 positive. So, not great breadth. But again, maybe not a big surprise when you're in a market that is trying to repair itself. We're in a correction. So, you know, again, nice earnings reports at the open. Not great results from Meta, but that was definitely offset by a nice day from Microsoft and also from Lamb Research. I think Meta's report actually sounded a lot like Google's, you know, that we heard from earlier, you know, that both are struggling with cash flow issues, and the market really frowned on that with Meta, just like it did with Google when they reported earlier.

8:52Ken Shreve:Exactly. Okay, and then among sectors, let's take a look at chips bouncing back today, but it's been one of the hardest hit in recent sessions. The gain today, about 6.9%. Ken, taking a look at the weekly chart, still down 4 % for the week so far. So what do you make of this potential comeback in the chip sector? Yeah, I mean, it was a decent rally for SMH. But again, it got up close to your eight-day moving average there. It couldn't hold, you know, it ended up close to 7%, but it did close off highs. And, you know, again, this is an ETF that has really gotten beaten down. So, you know, it's got one, two, three, five really, really harsh down days.

9:48I mean, that's a pretty big percentage decline over the past five days. So, it recouped almost 7 % of that decline in one day. But, I mean, just look at how much it still is going to have to rally to recoup that entire loss. So still is going to have a lot of overhead to get through here. And look at the volume that it rallied today. And look at the volume that it came down in. One, two, three, four days, very, very heavy volume. And now it's just coming back. Like, you know, David Ryan talks about that wedging a lot and, you know, you're coming down in heavy volume and then you're just kind of coming up and, you know, really, really soft trade.

10:32So not much of a rebound with conviction with the SMH today. We'll see how it does, you know, we'll see how it does with this rally, but below a lot of moving averages still. And, you know, you always like to see a little bit of conviction when something is rallying back. You like to see a little conviction behind the buying. So I didn't see much of it with SMH. This still looks challenged, just like the indexes here, and maybe a little short covering here today. So we'll see if it can continue to rally. But the most important thing is how is SMH going to rally? How are the indexes going to rally?

11:12How are these individual stocks going to rally once the short covering runs its course? Are you really going to see some true institutional buying come in from the sidelines? That's the real key here.

11:23Ken Shreve:Well said. Over in the software sector, here's IGV. We also want to talk about this as well. We've been looking at a number of software stocks. So another blue day here for the IGV. Stocks like Snow, Datadog, those have been on our radar. And Fortinet, we talked about the earnings. I don't know how this one closed. Okay, a disappointing close there for Fortinet. Yeah, it's really tough, really tough close there. And this was a blockbuster, really a really nice earnings report. So, you know, people long this stock. This was just really kind of exactly what Teradyne yesterday did in the chip equipment group.

12:08This is one of the really strong stocks with the company that did 333 % earnings growth yesterday, Teradyne did, and gave it all back. And Fortinet had a nice 41 % earnings growth and 26 % top-line growth and just gave a lot of it back today. I didn't really see too many stocks in the security software group rallying, you know, when Fortinet was up huge and close to an all-time high. You can see just the, it was just kind of a ho-hum reaction to the group. I was looking at CrowdStrike and Palo Alto Networks and just seeing, you know, some of these other stocks were, you know, Palo Alto had a decent day, but certainly a disappointing performance for Fortinet here.

12:58Ken Shreve:And I think that this speaks to something that senior market strategist Mike Webster was saying on IABD Live, and that is, can we trust the breakouts at this point? Can we, you know, even for these impressive growth stocks turning in fantastic numbers, like you said, can we really trust these setups given the pressure that we're seeing in the broad market? So just one more piece of evidence on that. Yeah, well, in the software space, again, you do have a name like Snowflake that is still acting well. But on a day when you have the NASDAQ 100 up more than 3%, Snowflake had a good day, up 5%. And this breakout is making a little headway.

13:42But then you have a name like Datadog, which is still having a problem breaking out here. It had a nice inside day today. It was up 1.65%. But where's the volume? Are institutions going to start buying this and really push this past a pivot point here? So it's just kind of biding time here, you'd think, on a nice up day for the NASDAQ, up strong. And for some reason, they're just kind of taking their time here. And this one's just kind of biding time ahead of earnings next week. So certainly not doing anything wrong, but on a nice update for the market, you'd think maybe this would have tried to break out here.

14:24But maybe just biding time ahead of earnings. Like I said, busy week of earnings for software stocks next week. Datadog is probably one of five or six stocks in the enterprise software group that's going to be reporting next week. All right.

14:39Ken Shreve:So some bonus stock coverage there for our audience. Most finance teams are spending on the wrong things. expense reports, spend policy PDFs that nobody reads, a close that stretches into weeks. That's maintenance, not momentum. It's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. We quickly want to take a look at XLF as well. We'll be taking a look at two financial sector names reversing higher, up about six tenths of a percent. The uptrend is holding in financials. Yes, I definitely wanted to give financials some attention today because even though the story was chips and a lot of beaten down chip stocks rallying today, I was looking in the market surge growth 250 and just seeing a lot of financial stocks moving and showing good chart action.

15:33And, yeah, nice upside reversal here for XLF. And we had seen some weakness in names like Goldman Sachs and J.P. Morgan and Citigroup. But some of these other, yeah, so some of the real big banks are not looking that great. But some names that we're talking about today are still looking quite good, especially some of the investment banks. And yeah, so.

16:02Ken Shreve:Sounds good. OK, let's shift gears and let's go to LRCX. You mentioned the strong earnings report here snapped a losing streak today, finishing up 18 percent, though off highs for the day, running into a little resistance at the 21 day line. Ken, this was a great trade for folks in that early April timeframe all the way up to really end of June. It was really only recently that this stock started falling apart in a pretty big way. But with how it came down off highs, it round tripped. I have this line here. It round tripped the entire move from early April. You know, that's not the kind of stock that we would be holding into earnings.

16:51Right. Yes, it was a pretty violent pullback. You can see the accumulation distribution rating got knocked all the way down to E because of all the heavy volume that came into the stock as it declined. So this was just, again, just a very harsh decline, institutional selling as it broke through the 50-day moving average. Stopped at the 200-day moving average, which is a good sign. But this is, again, just another really, really good earnings report and outstanding guidance, too. And you look at a gain of almost 18%. That's good. And a move above the 300 level. but again, a stock that is just facing some overhead supply here.

17:36There were sellers in the stock today that knocked it off highs. Yeah, 18 % gain is solid, but a stock that is still facing some overhead supply issues and obviously still firmly below the 50-day moving average. It just tells me that this stock is probably going to pause here, and it's still a long road to get to that 50-day moving average, probably just going to consolidate here. anytime you get, you know, a big drop off highs like this with the volume that you saw to the downside with LAM Research. And frankly, a lot of leading stocks, you know, broke bad like this below their 50-day lines after big breakouts and big, big runs.

18:20You know, it just tells you that they're probably going to base and consolidate below the 50-day line for a while. And, you know, of just the fact that they couldn't react to earnings. And again, I mean, Lamb Research did react to earnings. It had a good day, but the price action, you know, I know Long's would have liked to have seen a close near highs. And, you know, so not a bad day, but I think the stock is still challenged here technically for sure.

18:49Ken Shreve:Let's take a look at two names in the financial sector. Here's Toronto Dominion TD, a steady uptrend. since that breakout in late March, early April, and quite an orderly pullback to the 50-day line, Ken. Yes, Toronto Dominion Bank is a very, very steady performer. You know, we're watching this decline to the 50-day moving average yesterday, and, you know, it closed near its lows. This was after the Fed meeting and after the market sold off, after the Fed's press conference yesterday. And it wasn't huge volume to the downside when it fell slightly below the 50-day moving average. And the rally today did come in lighter volume, but we were encouraged to see that bounce off the 50-day moving average.

19:37So Toronto Dominion Bank, this is a stock in the leaderboard model portfolio. So we did actually take the opportunity to increase the position a little bit today, even though it did rally in lower volume. We were encouraged by the move, not only in TD Bank today, but in the financials in general. So we increased it back to about a 5 % weighting. And earnings aren't until the middle of August here, but such a nice uptrend after that breakout over the 100 level. You can see it just kind of rode those short-term moving averages higher. You know, good support at the 50-day moving average so far, but a lot of the money centers are still doing well here.

20:20Ken Shreve:Yeah, great trade by the leaderboard team there. Let's also go to AMP Ameriprise. Hanging out in a buy zone after a cup with handle breakout. Yeah, love the upside reversal today and right back in a really crystal clear buy zone here. I mean, this was a nice cup with handle breakout. You see, about five days ago, came down to the 21-day moving average, the green line there, yep, and reversed higher. The very next day, it reclaimed that handle entry. Yep, right there. And then today, reversed off of that eight-day moving average, and it's right back in that 5 % buy zone, right around that 540 pivot in that area.

21:11So Ameriprise is financial planning, asset management, wealth management. But again, a good industry group, the investment banking brokers industry group ranks in the top half of our industry group rankings. Good fundamentals. They just reported earnings. That's when it kind of reversed off of its 21-day line here. So again, a good solid name. Composite rating of 95. I particularly like that accumulation distribution rating of A+. Plus, just seeing a lot of stocks under accumulation here. That A-plus accumulation distribution is just, you know, you're just seeing a good volume increases behind gains and not much in the way of heavy volume declines here.

21:56So just a stock under accumulation, like a lot of financials here. So looking pretty good.

22:03Ken Shreve:Okay, well, speaking of earnings, let's go to our rapid fire earnings. Still a lot of them. Round up. Yep. Yep. So we've got Amazon booming cloud growth here, a revenue beat, seeing shares up 8%, Ken. Okay. I like the look of that. What was, okay, so that looks like up at$2.55 in after hours. So that is, that looks like it's going to move. Back above the 50-day and challenge the highs from a couple of weeks ago. We could see a move similar to Microsoft today. That looks like it'll be a breakaway gap. So that could be good for the Qs tomorrow. We shall see. Sounds like that. Yeah, yeah. All right.

22:49Ken Shreve:Next on the list. Yeah, Apple usually, we'll save Apple for last. Yeah, Apple's a little later, yep. That usually is a little later. So next on our list, let's go to GH, Garden Health. This is a good look. Up 6.4 % right after a bounce off of the 50-day. We like seeing that. That was a nice pre-earnings move for Gardent. A nice move off of the 50-day. Good to see that one moving after earnings. This is a leaderboard stock. And I actually own this one personally. And I was on IBD Live yesterday. I said, you know, a little risk averse. So I trim this position back myself a little bit ahead of earnings just because that's what I like to do.

23:40Just, you know, trim a little back and let it ride. But, yeah, good to see this one rallying. The weekly chart is just a good classic test of that 10-week moving average after the breakout. That's just what you like to see as a stock pulls back and tests support.

24:02Ken Shreve:Exactly. Okay, we have a couple of other medical sector names to check on.

24:23Ken Shreve:Illumina out with its report. I'm seeing shares up 2.8%. This is another stock that's had a really strong uptrend over the last couple of months. And today, definitely rallied, headed into the report in the regular session up 5%. So adding another almost 3 % after hours. Yeah, just a maker of lab instruments, you know, and kind of a defensive stock. Very steady, steady business Illumina has. And again, just not even touching the 50-day moving average, just finding support along the 21-day line during its uptrend. And look at the move it made ahead of earnings and up again. So a lot of these healthcare medical names getting a lot of money flow relative strength line up near highs, acting very, very well here.

25:12Ken Shreve:Sure is. Sears NBIX, reversed higher in the regular session, a stock that's been in an uptrend since the last earnings report. Not seeing a whole lot of action in the shares so far. As of right now, just up a half a percent. Not too liquid, it looks like. Very, very, very profitable biotech. Very big in neurological, psychiatric drugs, but very high-quality biotech companies. strong return on equity and a longtime leader. Okay, so we'll keep tabs on that for the regular session tomorrow. Well, one disappointing, at least initial reaction from the medical sector would be Verisite, VCYT. The stock is down 8%, basically giving back, as of now, the gain during today's regular session.

26:04Ken Shreve:It was up 7.3 % today in the regular session. A pretty good look to this chart and the fundamentals as well heading into the report. So we'll have to see what unfolds come the regular session, but the initial reaction here on the downside. Yeah. This was one I was watching because it has a nice composite rating of 96 and it was a nice breakout and pull back to the 21 day. A couple of things that caught my eye were just the annual earnings estimates for this company. They earned$1.78 last year. And then I just noticed that the earnings estimates for this year and next were really slowing to a crawl.