Was This Week A Game-Changer? Robinhood, Elf Beauty, Targa Resources In Focus

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0:39Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Friday, September 18th. It's Alyssa Coram along with Justin Nielsen here, and we're going to be taking a look at the market action. Also, some notable stocks to watch. So speaking of, what was notable today to you, Justin?

0:57Alissa Coram:You know, there's a lot that's looking interesting, which is encouraging, but we don't want to get ahead of ourselves. So let's focus on just a few. We'll take a look at Robinhood. A lot of interesting action going on in the crypto space. I do have a position in Robinhood myself. Let's also take a look on the consumer side. Elf, that one was something that kind of caught my attention. hasn't been on my radar for a little bit, you know, as it was below the 200 day, but recently over the last couple of months back on there. And then also got to give a tip of the hat to oil, the pipeline in particular area, transporting the oil and gas.

1:36Alissa Coram:That's been a trade that is still continuing to work. And so we'll look at Targa resources. TRGP is the ticker symbol on that one.

1:43Justin Nielsen:Sounds like a plan. And yeah, we won't get ahead of ourselves, but we'll continue to take things one step at a time. So speaking of, let's take a look at where the major indexes stand. Here's the NASDAQ composite up four tenths of a percent in today's session. And looking at the weekly chart, you can see a nice upside reversal at the key level there, the 10-week moving average. Meanwhile, the S &P 500 up about two tenths of a percent on the day. So it's still right at a critical juncture, but major improvement versus where it closed just a couple of days ago. We are still seeing some weak areas, including small caps down a half a percent on Friday and a weak week for small caps.

2:31Justin Nielsen:the IWM down about 1.7 % on the week. The Dow also in a weak spot down 1.9 % on the week with a decline of about two tenths of a percent on Friday. But let's start with and focus on the good, right, Justin? Here's the NASDAQ. So the major news catalyst this week being the reaction to the Fed raising interest rates. We, of course, have a lot of other cross currents that we're dealing with, but the tech heavy index trying to get its mojo back.

3:09Alissa Coram:Yeah, absolutely. And the best thing I can say about the action today was it was up, right? We have seen so many times where there's what looks to be a critical turning point in the market. And the unfortunate part is we just don't get any follow-up strength. So while it wasn't a big day today, it was big enough. You know, it was just being up was I think a big win. Yeah. And getting above yesterday's high, that was something that we saw happen over and over again. It just couldn't hold it. So the fact that we held the gains through the close, uh, was a positive. Now, of course we're heading into a weekend.

3:48Alissa Coram:So again, I think it's back to what you were saying one day at a time here, let's not get ahead of ourselves. But certainly it was interesting to see that follow up strength and the NASDAQ. The one thing I will say, I mean, we started with the good, but we have to say on the downside, we just don't have everything rolling together right now. There's a lot of action that is very, very targeted in certain areas, whereas a lot of other areas are kind of falling and just not showing the follow-up strength. So it's a little tougher when you've got either your boat rowers going at different speeds, different strengths.

4:29Alissa Coram:It just doesn't give you a straight narrow path. And that's what we've been dealing with for a while here. But if we can get things kind of corrected, that could be beneficial. Or we just have to focus on tech because our whole methodology is about going where the strength is. And right now that's in tech.

4:49Justin Nielsen:Yes. And we'll take a look at some of those sector shifts in a little bit, Justin. But one other thing on a technical note to mention for the NASDAQ composite is we've been talking about the 50-day moving average and 26 ,000. And this marks low that you pointed out on IBD Live, 25, 9, 10 in change. On Wednesday, we did get a little shakeout below that level, closed essentially flat. And this was on that very wild intraday Fed reaction day. And then we got the big day two reaction that we liked clearing a trend line. So that was a good shakeout. So positive from that perspective. Let's see if we can continue to get that follow on action to the upside, like you mentioned, and clear this sideways range and get more participation and leadership.

5:46Justin Nielsen:Can the market just do that for us?

5:47Alissa Coram:Right, exactly. And you got to figure my order, you got to figure that after a number of times where it's kind of faked one way and then gone the other faked one way and then gone the other. Um, you know, it, it, it only has so many of those in it right. Um, now granted it, there's nothing to say that this is the final time. Um, but I did like the fact that we did get that shake out that we did close again. It wasn't an upside reversal by any stretch. Um, but that we did close off the lows back above that level was important. And Allie, I'm going to switch back to something that you pointed out that deserves a little bit more attention, That weekly chart, as you pointed out, let's spend a little bit of time just making sure people see this because that is a good look there, right, for the week where you do have an undercut there of kind of lows.

6:40Alissa Coram:You undercut that 10-week moving average line, but look where we closed. You know, where we closed is something that we focus on so much on our daily charts, but it's also very important on our weekly charts. Remember that a lot of the stock analysis that Bill O 'Neill, the founder of Investors Business Daily, did was on the weekly charts for individual stocks. Now, for the market indexes, he really focused on the daily. But it's nice when you see good action on both. And we hadn't had that completely for a while. The more we can see that, I think, the better, where you have the daily and weekly kind of agreeing with each other, at least on a closing basis for the week.

7:23Justin Nielsen:Exactly. All right, Justin, let's get quick thoughts from you on what's going on with the S &P. When you're ready to take AI further, faster, your infrastructure should be ready too. Spectrum Business delivers the network and the tools to help you expand at the rate innovation demands. Learn about the Spectrum AI Accelerator at spectrum.com slash AI. Why?

7:47Alissa Coram:It's hanging in there, you know, not as strong. The fact that this closed, you know, on the Fed day and look, it's often going to be very volatile on Fed days. So no surprise there. But where this closed was a lot weaker. And while it's nice that it got above those highs yesterday and continued a little bit higher today, as you mentioned, we are not out of the woods yet, Right. Whereas the NASDAQ composite got its low above the 21 day moving average line yesterday. This still has some work to do. It's kind of right there in no man's land. Not weak enough to be below the 50 day, but not strong enough to really get above that 21 day moving average line.

8:29Alissa Coram:And the and the gap between them is very small. There just isn't much room between that 21 and 50 day. So you could see this, um, you know, with just very small movements go up or down below those moving average lines very easily. So, um, it's, it's again, nice that we got at least some follow-up strength here, a nice close, um, you know, finishing kind of, uh, at, at the highs of yesterday as well. Uh, but again, that 21 day moving average line, I'm going to want to see not just the close get above that, but also the low get above that line.

9:04Justin Nielsen:Yeah. And I think going back a couple of weeks ago, I don't know if it was the first close below the 21 day that sort of put the new power trend for the S &P into question or one of the other breaks of the 21 day. But I was saying, wouldn't be surprised to see a pullback all the way to the 50 day and then some. And that's what we got. And I actually think that these pullbacks can be good opportunities, but in real time, you don't know if you're going to continue to get a test of that area like we did in the July timeframe, right? Or if we are going to bounce from here. So I think it'd be great to see a little bit more oomph here.

9:48Justin Nielsen:And then, of course, it also will be influenced by what we're seeing underneath the surface with leadership. But I think that these pullbacks can provide opportunities. So trying to look at the silver lining here. But in the not so good data point category is what we're seeing with weakening breadth, Justin.

10:13Alissa Coram:Well, one more point, if you could just go back to SPX real quick, because you made me think of something as you were talking that's important. A lot of people might be looking at the pullback and saying, well, it's not much of a pullback, right? Remember, there's kind of two ways that you could have a pullback. You can either have it, that correction in terms of its distance from its highs, but also kind of distance in time, if you will. Uh, as time kind of progresses, uh, it, that's one of those things where you either wear them out or scare them out. Um, and this has felt a little bit like the wearing out part.

10:50Alissa Coram:Uh, so while a lot of people are saying, but look, we haven't really corrected that much true, but I think it's lasted long enough and there have been enough fake outs where people are kind of getting a little tired in that regard. Um, but yes, going back to RSP, as you mentioned, uh, the breadth is certainly not there like it used to be. It was one of those things where RSP was for a long time showing a very different look, right? It was the RSP, the equal weighted S &P 500 was looking much stronger. It was showing very different action. It was at highs when a lot of the other indexes couldn't get there.

11:28Alissa Coram:But now it seems like the MAGS Magnificent 7 trade is definitely kind of back on when you look at the MAGS, which is our Magnificent 7 ETF by Roundhill, that doesn't look bad at all. It's kind of like a very big contrast to what's happening with RSP. So whereas the other 493 were kind of saving the day for a while, it really seems like it's back to the Magnificent 7 now. Although worth mentioning, not the case today. Yeah.

12:05Justin Nielsen:Not the case today, but that relative strength in recent days. Yeah. And I think it is interesting to take that little step back. And for me, this is more with leading stocks and knowing that I can be in a big winner and there will be some days that will test your conviction, right? where it'll be a day where, oh, you would think this should go if the market's really running, shouldn't my stock also be participating? And for me, sometimes I feel like if I get too granular, sometimes that trips me up and shakes me out. If it's still holding versus it's moving averages or looking at the weekly chart, sometimes that day-to-day action, I feel like, can give me a mixed signal.

12:57Justin Nielsen:Sometimes it can lead to more pain and it depends on how it does it, is it just lagging some other leading areas or are you really seeing a sharp decline or is it just not seeing as much oomph as some of the other areas? So we'll keep that in mind and see if mags here can continue to outperform the S &P and holds above that 21 day line. Yeah.

13:20Alissa Coram:And it's really important to kind of be checking multiple timeframes. Um, you know, if you, if you spend all your time on the intraday chart, uh, it's going to be very hard to hold things because, uh, you know, every, every little blip can kind of scare you. Um, but you know, you take that step back to the daily, um, or, you know, let's, let's even take a step back on the mags for the weekly chart. And, you know, there's, there's really nothing, nothing bad happening here. It's just like, right. It looks like it's right on the verge of a potential breakout. So yeah, it definitely helps, I think, to go back and look at the broader timeframes to kind of put things in perspective.

13:59Alissa Coram:And that's why, again, a lot of our rules will sometimes venture around that weekly chart and what's going on there. A lot of the patterns were from weekly chart patterns. The sell rules that have to do with the 10-week moving average line. Yes, the 50 day moving average line is usable as well. But even that, you know, it's, it's very different to use 50 days, which is now you're looking at what, two and a half months, as opposed to a shorter term 10 day, that's a couple of weeks. So really, you know, be very aware of what timeframes you're using, and know that there's good and bad for each, right?

14:38Alissa Coram:If you're using a longer timeframe, yes, you're going to probably have bigger drawdowns, because your signals are going to come a little bit later. But the good news is you're going to be able to hold on to things for bigger gains because if it's very normal action, you're not going to get whipped out of things at every little move. So everything kind of comes with its benefits and its costs. You just have to find what works best for you.

15:02Justin Nielsen:Well said. Okay. Here's just a really quick look at the Dow here, Justin, notable in that earlier this week, it closed below 52 ,000 as well as the marked low at 51 ,542. It did close the week above that marked low. So it has that going for it, I suppose, but definitely showing that relative weakness. And I want to get your thoughts on small caps as well as the interest rate picture here. So here's a look at small caps. This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination-focused dining, and cultural enrichment on board and on shore.

15:50Justin Nielsen:And every Viking voyage is all-inclusive with no children and no casinos.

15:55Alissa Coram:Discover more at Viking.com. Yeah, so look, small caps are very sensitive to the interest rate changes. and an interesting discussion that I had with Matt Caruso this week on the podcast. He was very adamant about, hey, you know what you really need to do is look at JNK, which stands for junk bonds. But what this is kind of showing you is the bond movements. And so you've got to kind of flip this on its head a little bit if you want to think about it in terms of yield. So today, for instance, the yield was up because the bonds were down. It's an inverse relationship. So what we had been seeing was a lot of destruction in the junk bonds, meaning heavier and heavier yields.

16:44Alissa Coram:You've got to pay up for the extra risk. And this is the cost of money that companies really have to deal with. Right. You've got your treasuries that are dealing with your 10-year and 30-year, which the 10-year is considered kind of your risk-free. But the Fed funds rate, I mean, companies can't get that. That's for the banks. And this is kind of more reflective of what the companies are actually doing with their debt. So I think it's an important thing to be keeping an eye on. And what Matt Caruso suggested was, look, if you are seeing this go up, you know, JNK going up, that's going to be better for the market.

17:23Alissa Coram:So, you know, keep keep your eyes on that. And we saw that right in March, at the end of March and the beginning of the April rally, April and May rally. That's what we saw. We saw that the junk bonds were going up. The yields were coming down. That was definitely better for the market. So that could be the thing that we look at here. And don't spend too much time on the long-term chart here because it does have a dividend that does distort some of the action. So some of those levels are not as important. If you looked at something that was including the total return, including the dividend, it didn't undercut that area in March like it shows here.

18:04Alissa Coram:So just you're really wanting to look at the short-term direction on this one.

18:08Justin Nielsen:Directional, yeah, short-term. Got it. That makes sense, Justin. Okay, let's continue forward and take a look at some of the sector action underneath the surface. Let's contrast what we saw happen with software this week. Here's a look at IGV. And on the day when you had the NASDAQ up, IGV down 1.4%. It was still up on the week, Justin, but off highs. And it is above a rising 10-week moving average, Whereas the chip sector up 2.2 % on the day. So seeing that major difference in performance on the day on Friday and it retaking a declining 50-day moving average. So starting to see some improvement here.

18:59Justin Nielsen:We have had a couple of tests of the 50-day moving average for SMH. could this time now be different where we could see a little daylight between the trading action and that 50-day line here versus this just being a straight-up rejection at that moving average. Yeah.

19:21Alissa Coram:The good news is we closed above it. The good news for the day is we close in the upper half. It's a little hard to tell. You have to kind of roll over to see the closing range in order to really be able to tell that. And so we calculate that out for you right there. So you can see 57%. So in the upper half. So those are all good things. But as you mentioned, look, we've been here before, right? So it's not just about getting the close above that line. It's about staying above that line. That's what we really need to see here. And look, IGV, you know, by contrast, remember, IGV spent most of the year down in the dumps, you know, from January to February, all of that time.

20:00Alissa Coram:it was mostly below its 200-day moving average line, just a really poor look. And even when it got above it very briefly in May, it just couldn't stay above it for very long. But two days, and then it started pulling right back. Now, this time, it has spent more time above that 200-day moving average line. It looks like it's been trending a little bit better above its 50-day moving average line and it's 21 day moving average line. So I'm not necessarily panicking with today's action. It's right there at the 21 day moving average line. But again, you like when these are going in tandem. And that certainly hasn't been the case as of late.

20:41Alissa Coram:They've been kind of taking turns, if you will. And even we saw that in the in the microcosm with, you know, all of the talk about AI destroying humanity and needs to slow down, needs guardrails. Well, what did that do? Software, you know, went up a lot and chips went down a lot, you know? So,

21:00Justin Nielsen:um, that's how we kicked off the week with that big news.

21:03Alissa Coram:It seems so long ago, right? Um, but you know, if, if we can, again, kind of get both of these rowing in the same direction, imagine what the NASDAQ composite, uh, and the NASDAQ 100 could look like. Um, but you know, the chips look, the chips have like twice the weight of software in, in the NASDAQ composite of the NASDAQ 100. So again, if you could get both of these on board, I think that would have a big impact on an improved look for our NASDAQ chart, which is already stronger than the other indexes. But I'm OK if it gets even stronger.

21:38Justin Nielsen:Exactly. Yeah, we'd love to see that. OK, let's take a look at some of the ARK Innovation Funds outperforming at the end of the week here. and ARKK up one and a half percent. It also had a really strong Thursday. So is this sort of that risk on, you know, high growth area of the market coming in back into favor here, Justin?