Transcription
Heat. [Music] [Music] Hey, heat. Hey, heat. [Music]
Hello and welcome to another episode of the stock market today video. It's Justin Nielsen here, your host. And wow, we've got uh we've got a show for you today to talk about what was going on in the markets. uh maybe not so many stocks to really come up with as ideas for you, but we'll scrape the bottom of the barrel and see what we can come up with. And to help me do that is Mike Webster, our senior market strategist. How you doing, Mike?
Well, it was a little mellow day. Just took a nap most of the day, you know, didn't do much. Sat on my hands. Yeah. Okay. Yeah. So, some something like that, more or less.
Um well, let's let's get into it because again, it was uh it was it was quite a day. I mean, um, for those that, uh, don't know what was going on, uh, we of course had some news coming out, uh, there has been a little bit of a dispute here over, uh, China's, uh, you know, basically control of rare earth metals. And Trump, uh, President Trump said, "Hey, you know what? Uh, I want to do something about that." And the, uh, result of that is kind of reminiscent of a lot of the tariff troubles that we've had. Uh, it's one of those news related instances. And so, of course, um you have to make some decisions in terms of what you're going to do in these situations when when they occur.
Um so, uh I'm going to pull up my charts real quick. And uh you want to do that? Are you sure you want to pull up charts? Yeah, we'll uh Well, I I think we have to uh I don't know what to do otherwise.
Um let's see. Does this come up? Nope. That's the wrong one. Uh, let's try that again. Uh, I have a lot I I I did I did restart, I promise. Uh, to try and No worries. A little uh on top of things. So, here's the NASDAQ composite. Um, yes, that's uh that is correct. It was down 3.56% uh for the day. The S&P 500 uh down 2.71%. Dow Jones Industrials down 1.9%. Russell 2000 2.73%. There just really wasn't anywhere to hide uh today. So, um Mike, your thoughts?
This just looks ugly. Um yeah, you know what? It happens. You know, news happens. Um and as Forest Gump says, other stuff happens. And that's what happened today. It it's um I'm looking at this as being very reminiscent of uh what we saw late last year, the uh December 18th day. if we could just go there. That's that's kind of the playbook I'm I'm using because you were in an uptrend and then out of the blue you get this big hit closing at the lows at about you know about the same percent move give or take that we had today. Same look and feel that uh that we had on this day and wow is that right? It was exactly the same 3.56%. Oh wow. I didn't even do I was just Okay. Well, yeah.
So, and that's what I was feeling like throughout the day like it was and that's why we took so much action on screen trader. We were, you know, up to our eyeballs in stock coming into today and we went to cash. You know, we started we we added one thing early on and even though it was up like three three and a half% or something on the day, um you know, on IBD live, I was saying that's not normal or natural. It's it wasn't acting strong enough. And that was our first sign. And then, you know, then eventually we we got the the um the message from the president and then, you know, all the selling hit. And it when you when you get a message like that, whether it's Powell talking or President Trump talking or someone else with some key information, you don't know what to make of it initially because there are so many tech text reading algos that are tied with um you know tied to everything that you'll get some initial selling or buying um that go you know that takes place and then you get the algos that are very short-term in nature. that are just trading off a momentum either up or down and they magnify that. So, you need a little bit, this is different than how it was 20, 30, 40 years ago.
Um, you need a little bit of time to see what the real reaction is. And let's just go to the inday chart. Mhm. Um because that'll kind of tell you you we have that initial move down and that could have easily been it and then you just jump up from there where you just mean revert back to where everything was. That happens a lot more than you would want or more than you'd remember. So you take some action in there but then throughout the day if it's not bouncing you know you just continue taking more action. you start off selling your your C stocks or or worse and then you go to your B stocks and then if you need to you go to your A stocks and get rid of those or you you know hedge I kept um what I believed was an A stock and I hedged that through SQQ in my own account but for a swing trader I just wanted us to go to cash because I don't like to hedge there.
Um and then we'll just back away now let's go back to the daily chart. Um, and you know what, just just as kind of a another another example, um, because there are those times where, uh, the the the market will come back. And I'm just going to go back here to, yeah, you know, exactly where I'm going. Um, you know, this day right here, you know, this was a very sharp move, um, you know, on on the downside and then by the end of the day, things were, you know, things were back up. So, if you if you overdo it too early, you know, then a lot of times you're kind of kicking yourself cuz you're like, "Oh, everything came right back and there's these beautiful upside reversals."
Um, but then if you don't do anything and you can get like a day like today, right, where it just keeps on going down and if you're hoping for an upside reversal that doesn't come, then at the end of the day, you're really hurting um because of the the hit that you've taken. Yeah. And so that's why and I'm glad that you brought up that day because I I learned a lot from that day because I took too much action. Um and you live and learn, you know, and and you I've got those days going back 30 years, you know, you're like, "Oh, on this day I really screwed this up or didn't handle that right." And then you just file it away as experience and then adjust from there.
Um let's go back to our unless you had something else on this. Let's go back to our current time and just you know what I think another just another area to kind of look at is um you know what what a lot of people were referring to as deepseek day. Uh this was January 27th the gap down. Again this was this was news over the weekend. Um and I'm just going to go to the day uh because again a lot of times these look different when you when you're in the middle of it and you don't you know you don't have that uh confidence that things are going to get better later, right? But uh this was deepseek day and it doesn't maybe look as bad because the gap down is uh you know hiding how far down it came like a GEV or something spec that was specifically hit with yeah GED down 21% you know yeah this is a Nvidia you know that was down 17% you know a trillion dollar plus company down that much in a day so yeah yeah so I think it's really reminiscent of both of those days. Now, the difference is deep seek was your second shot, right? Your your first shot across the bow was December 18th. Then we got the second one with the deep seek. Whereas with the current market, this is kind of our first shot, right? Because we've been up and we were up in new high ground and and this was frankly the break that I was looking for with the 1980 president that I threw out. even given today's um action, I'd still throw out that precedent because it broke. You know, it's just that this happened to happen afterwards. So, it's kind of there in spirit, but it's that precedent is dead, right? is completely dead. But the concept of having a big move up from the bottom as we did in 1980 and then ultimately having a bad break like this, you do want to be aware that the character of this market could have changed for the short term uh short to intermediate term. We don't know. Uh we don't know how it's going to play out. Nobody knows. uh and it's kind of most likely it's probably going to be a time element as you see the the relationship between uh China and the US. I think at most people's base cases they're going to kind of ride it out. There's going to be some back and forth. You're going to see some movements of you know like we think things are getting worse or better, but it's going to be a while probably till it's um worked out. And what the market has to do is the same thing it did back in February to April uh was digest the news and put up a kind of um put some number on it in a spreadsheet of how much risk of of different outcomes and sometimes it just takes time for that to work itself out where you you're getting new pieces of information. What does China say? What does China not say? What do they actually do? What are we doing? and what are we saying and what are we not doing? Like all these little elements that go in there that really just need time to work itself out. And time is not something that you like to wait for, but sometimes you just have to um deal with it, right? And I can tell you back on the that December 18th, I was reluctant to just give it time and I started pushing it too hard and got chopped up in there because I was wanting to play again because it's, oh, we just had this nice uptrend. We had this one down day and there was a upside reversal in there. It looked good and you would want to take some action but I frankly took too much action um during that time and and filed that away of you know what the next time we get one of these bad breaks of the 21day just going to take it easy and um oh I happen to have my mug here when I went to Winslow Arizona. Take it easy.
Um, but uh and that's wasn't planned, but that is what you know I'm just going to do is just dial things back dramatically from where I was coming into today until we get things tightening up. And you'll see that with the spreads, the distance from the high to the low getting tighter. And also when President Trump or we get some news from from China, when that news comes across for the movements to be smaller, that'll tell you that it's baked in. And we just need time and uh we'll we'll we'll see how that um that works out, but it's not the time to hope. And and with swing trading, you did want to take a lot of action today. Regardless of what style of swing trading you're doing and position trading, you want to take action. You would have wanted to take action here, too. This is not normal. You know, there's something to be said for position trading is slowing things down a bit, right? But you got to do something on a day like today. Bill, who was a position trader, not a swing trader, Bill O'Neal, the founder of IBD. Um, if we were sitting around not doing anything, he would have been, you know, what are you guys doing? Don't you see what's going on? Things are changing. And you've got to react. It doesn't mean that he would be going to cash. Um, like we did with swing trader, but he would have been raising cash, especially on a Friday. There is something to be said for you're taking on extra risk, you know, going into a Monday. And the last thing I want to see is like a gap up of like one or one and a half percent on Monday. That would be that would be weak. You really want to go underneath the 50-day. The best case scenario in my mind would be a gap down below the 50-day with an upside reversal. And um you know I I don't think that's going to happen, but we we'll see. We'll take it one day at a time. And just follow your rules. What do your charts tell you to do? If your chart is saying to do nothing or maybe you've got such a low cost basis that you can sit with a large uh amount of your stock, that's fine. You know, just have some lines in the sand. Have a plan. Um hope is not a strategy. Hope is not a plan. Have a plan. If your plan is whatever, any plan is better than no plan. Email it to yourself so you're not in denial going forward because I I do worry in bull markets everyone gets in this mindset of just buy the dip, buy the dip, buy the dip. And that works until it doesn't work. And um you know, yeah, it is what it is.
Well, and um again, you have to wait to a degree and let the market tell you, right? because um you know anyone that says oh well you know this is just a pull you know a minor pullback this market is resilient or um hey this is this is the end of an era it's time to you know get all your canned goods and go to a bunker. We we really don't know that yet. Uh you have to kind of again wait for the evidence to pile up one way or the other. And even like what we said for today that's what we were doing. You know we didn't do all of our selling at the beginning of the day. We did a lot, but then it was like, okay, now we're setting, you know, setting some time limits, setting some, you know, hey, can we hold the lows? And then once we started rolling over and taking out those lows, okay, it's another round of setting. I I of selling. I know you like to do a lot of time weighted um for 15 minutes. That's what I was doing all day today because it slows you down. Like because when you want to do so much, just put a timer on. Five minutes, 10 minutes, an hour, some amount of time that meshes with your style so you don't do too much. I do that on the buy side, too, right? But you're absolutely right, Justin. We don't know how this is going to play out. President Trump doesn't know how it's going to play out. President Xi doesn't know how it's going to play out. Time will tell. But what we do know is we've studied history and when you get a bad break like this, it normally doesn't resolve itself by just gapping up on Monday and never looking back. That would not be normal or natural, you know. So, the odds are you're going to have a digestion phase at this point. Maybe today we've seen the low and it just hovers between today's high and low for a few weeks. That could happen. And and don't be surprised that we get something like we did in December, right? We had that big move down and then um it looked like, oh, we're going back up to highs and then it just doodled around back and forth, back and forth. As opposed to something like in 2022 where, you know, we would come down fairly sharply and then jump up sharply and it was like, "Oh, I've got to get back in because otherwise I'm going to miss it." And then we'd roll over to new lows. It was it was a very different market. And I mean, you know, punishing in its own way. If you um if you kept on going in too heavy rather than incrementally, um you could find yourself in a lot of uh in a lot of trouble because you'd be you'd be getting heaviest at well, a lot of times you'd get heaviest at the at the top and right in time for it to roll over. And so it it can be very tricky when it's um a long time uh that that that you're happening. But again, a short a short move can sometimes be tricky, too, especially if it goes sideways. Uh sideways action can be one of the most dangerous because then it just whips you around back and forth, back and forth until you throw in the towel right before things really start moving to the upside.
Um, let's uh I'm glad you brought that up. Just be before we move on, I would just say for for folks what you can do going forward is use feedback from your future trades. you know, any trades you do the over the next couple weeks to dictate how deep you go in. If you are let let's say you're in the zone and you figure out the spaces that are working um and you start connecting next week with some trades and keep going deeper. But if you go back in and you buy some stuff and it's just you're taking loss after loss, just keep getting smaller and smaller. um you know just use that feedback of of the market that now is not the time to to uh be a hero.
Yeah, absolutely. Um I want to also just take a look real quickly because we had been talking about the Russell 2000, the strength in small caps. We've been getting this nice um you know trend above the 21-day moving average line finally after what seemed like you know a lot of false starts. Um, does this kind of uh change change your mind on uh the small caps? No, because it went down with everything and it actually went down less than the NASDAQ. Um, so no, but let's pull up RSP because that did bother me. Um and this was breaking earlier than this was kind of leading things and um from memory it was weaker earlier on um on on a relative basis because it's a slow and pokey index because it's equally weight 500 stocks and breaking through the 50. But more important than the 50 was going underneath that 18603 because that is um you know an uptrend is higher highs and higher lows. So now we have a lower low. Um those happen but you just don't want um you want to get back above the highs from last week sooner rather than later. Uh, but that would be kind of weird. Like you you want to that's why you want to look at so many charts every day is to get ingrained what's normal and natural and a trip back to new highs just straight up to new highs would be very abnormal. It needs time to do something either go lower or go sideways but it's just a reality check like just go back through charts. Yes, there are exceptions, but most of the time you don't get a break like this and just, you know, it's like oops, you know, it was just, you know, a non-event and and back off to the races. I I think it's going to need time, but we will see. That's also just dictated by the news because this was a news uh move. Yes. Right. And and you know, sometimes what happens is you get immediate news that counteracts it and then it's um you know, almost like one of those things where you put your thumb over uh as opposed to what usually happens is oh there's a little bit of back and forth um some some jockeying for position amongst our world leaders. Uh and and that takes you know again that takes some time. Usually, usually that stuff doesn't resolve itself over a weekend, but it can, you know, it can it can be very it can be very quick, much quicker than you expect sometimes.
Um, let's go ahead and take a look at some of the uh the ETFs. We'll take a look at the our sector spider ETFs plus a few extras. Um, SMH, hardest hit, down 5.9%. Um, again, this was this was where the strength was and uh a very hard hit down to the 21-day moving average line. So, you might be like, well, it's still trending above the 21-day moving average line, but um what do you think here, dude? It's down 5.8%. Okay, dude. Okay, enough said.
Um, ARC K, just to again get a sense of where the the more speculative nature of things, this was down uh 5.6%, so ugliness there. XLK as you would expect. The technology uh sector spider ETF that was down 4%. So um you know you can you can see that this was especially leading the NASDAQ down. Uh the MAG7 uh no no help there. Uh FNGS down 3.7%. So uh taking a hit uh quite the hit there. I bet Bitcoin um this was this was no help. This was down 3.7. uh Q's uh as we mentioned this was down about three and a half percent um the you know what we'll just go ahead and put the QQ which is the equal weighted um you know it was it was again it was pretty broad-based 3.1% down for the QQ equal weighted NASDAQ 100 um energy no help there this was back below its 200 day moving average line um XOP as well that one I I think got hit really hard so XOP as the explorers and producers. This was down 5.4%. Um, you know, a lot of times you might look at something like XLE and say, "Oh, well, it's it's 40% uh, you know, between, you know, Exxon Mobile and Chevron." Uh, but if you look at RSPG, which is the equal weighted um, energy, you know, this was this was down 3.7%. So, uh, it was not just limited to to the big heavyweights. In fact, it was worse. as you said, explorers and producers really taking a hard hit. Um, and the oil and gas. Uh, so yeah, pretty pretty broad base there. XLY, the consumer discretionary, that was down 2.75%. Uh, SPY coming in uh, as we mentioned, down 2.7%. Uh, ITA, this has been an area of strength. The aerospace defense, uh, that was down 2.5%. So, um, you know, following up on a little bit of weakness yesterday, RSP, as you mentioned, Mike, that was down 2 and a/4%. XLI, the indust industrials, that was back back below its 50-day moving average line with a 2.2% loss. Uh, no help with the uh Oh, I didn't mean to do steel, but well, since we're there, steel is down 4%. I meant to do XLF, and uh that was below its 50-day moving average line with a 2% uh 2.2% drop. the materials down um 2.05% back below its 200 day moving average line. Uh XLC, which is, you know, really your Google and uh Meta are the two big heavyweights there. That's back below its 50-day moving average line with a 1.8% loss. Uh so, I mean, not bad in relative terms. Uh, but still, Google held up for out of all the big ones, Google was one of the ones that was holding up. I mean, yes, it was down 2% close at its low. It looks like it's a magnet for the 50-day, but relative to so many other big cap like pull up Apple, you know, a slow pokey Apple down, you know, looks like it wants to go down to its 50-day. And then Meta, which is, you know, as you said, in the same sector as as Google, that one was looking like it was going to do that double bottom and then that got turned away, too. And it just the more of these big cap ones that you look at that are in trouble or look like they want to go lower is just another reason to just kind of pause, you know, and and take it easy. And uh one of the areas we've been talking about on these Friday shows, XBI, the biotech biomed, I mean relative, not not as bad, you know, down only 1.4%. Uh certainly the chart was not hitting any uh any areas of support that it was breaking through. Um I will say I will say Justin as I was looking through trying to find something for us to talk about that was worthwhile. There were a lot of bios that look good. They're just ones that don't have earnings or just you know on a story. So they're not something we want to highlight here but that did seem odd that there was a lot of strength in that space. Not not broad base because you can see it was down 1.4 44 but there that's one area to certainly uh look at but I would keep those positions small. Um and you know uh IBB which tends to be a little bit more concentrated in its positions but another biome uh biomed biotech ETF uh that was down 1.4%. So just uh again pretty pretty similar as was the healthcare XLV. Um this you know started looking like it was getting getting some oomph um but that had a 1.4% 4% drop XLR the real estate which again look the REITs a lot of times will be one of those places where folks hide they look look towards those income plays um this was down you know only 1% but again you look at the relative strength it's hard to get too excited about this right now um NLR uh an area of strength that we've been really looking at very closely we had this on swing trader and and exited the position this was only down 0.38% but man, look at where it was compared to compared to its highs today, you know, because and we sold it, you know, a lot higher and I didn't want to, but there's comes a time where you just kind of sometimes to think clearly going to cash is is a strategy I like to do because then you're you can you're not u making excuses for your stocks. You can just look at it clearly and then sometimes you're like, "Oh, wow. I shouldn't have done that. I better get back in." But many times it just kind of helps you to to um restart and that's not a that's not a good look going into a weekend. But yeah, kind of by default the strongest thing out there, right? And um you know a couple other areas um you know like like the REITs utilities tend to do a little bit better. Now again the normal correlations have been kind of thrown around because so many of the utilities are kind of AI adjacent, but this was only down 0.4%. 4% the XLU. Um, and uh as you would expect uh there was some hiding going on. So XLP even though well off its highs, this was actually up for the day. This is the staples where again folks tend to hide. And then GDX uh and GLD, these were two areas that were up uh for the day. Gold GLD, the Spider Gold shares up over a percent uh was looking kind of bad yesterday. It looked like, okay, this this is looking like it's going to come in. Um, but you know, when the market gets so bad, gold starts looking even shinier, right? A shiny piece of metal with no earnings, as Bill would say. Yeah. Yeah, man. What what what a strong strong move there. And I agree. It did look like I think if it wasn't for this news today, this would have been making a trip down to the 21day. It was just looking like it needed to pause. Yeah. When I look at it this day, I'm thinking this is going down. Yeah. that that's that's your e expectation and totally entitled to like go out to a monthly on this one. This could certainly be just a first pause in a really monster move higher. Like you can picture this being well over $600 in, you know, the end of next year. And I just didn't, you know, I mishandled it. And so I got to figure out a way to get back into it. And so hopefully this pauses and gives me something some way to get back um back into this position. It wasn't today. It was more of just like you said, it was a hiding place of people who have to stay fully invested or don't want to go to cash. Okay. Where are they not going to get their head handed to them? You're less likely buying gold than just buying, you know, SMH or something like that. Yeah. And and besides, you know, gold and um you know, silver um the the platinum, I mean, we were talking about that uh you know, today and and palladium. Uh it it was really, you know, as Scott Sinclair says, the things you can drop on your foot that, you know, held up a little bit better. Uh but not even palladium was that great.
Um, let's talk about some of the stocks uh that again not really an a time in which we're really looking to go go heavy on things. But one of the areas that does benefit when you've got volatility is uh you know the exchanges right that's that's where they can make some of their money is more trading happens. Uh so CBOE the glo you know uh uh the financial financial exchange that was up 1.6%. What are you seeing here Mike? I'm just seeing something for us to talk about. We we've got this thing where we talk about three stocks regardless of what these aren't really bad. We might do this part a little bit quicker and get to the wrap-up of charts. you know, when I'm just not that excited about it, but we have to talk about something. And and so the RS line, you know, let's kind of go through this RS line looks good in the very short term in that it's poked back above its moving averages, but you step back to the beginning of the base and it's weak. um you know relative to that because it's so far off those highs but at least it is in position where if you were buying it here with this being um an alternative pivot. It's a little small cup with handle and today would have been your alternative pivot. uh you know, you could have bought some and then using today's low as your stop and then if it goes through the the high of the handle, which was a week and a half ago, then you could be adding to it and still using the same stop area because that would be right at the 50-day. So, if you are just dying to buy something or maybe you're in an account where you kind of have to, um, this is where I'd be looking something where I could define my risk and also a place that hasn't been running up that it's in totally entitled for a normal pullback. This this isn't really entitled to a pullback. It might have one just because it's not super dynamic, but um, yeah, it's a C quality. I'm just I'm just keeping Well, and I I did notice that you chose all C stock. They all began with a C today. Uh so here's Yeah, here's CBOE. Um, um and you know what? Uh it's well, we'll we'll get to in a little bit. I'm I'm going to I'm going to throw kind of a a little curveball your way, but um let's talk about Casey uh Casey's General Stores. Um, again, you know, in the in the super supermarket uh mini market uh space, you know, this has a lot of uh a lot of, you know, a lot of convenience stores. 2,658. Um, still holding the 21day 21-day line here. Uh, seems like it's getting support. And I mean, it was up, but I guess that's about all you can say, right? I do kind of like this one. Um, this is from a standpoint of if you just didn't use the indexes, which is a strategy that there is a strate not the strategy I use. Uh, but there is a strategy out there of just letting the charts tell you what to do on an individual stock basis. Kind of doing a bottomup approach. Nothing against it. It's just not how I'm wired. And this would fit in there where it's kind of disconnected from the rest of the market. It doesn't seem to move with every wiggle and wobble of the market. is more of what it's doing. I like how it's reacted to the last couple of earnings um on there and it's acting normally. It's not like this AI stock that has these wild moves. It's just kind of plugging along. This is something I think I could see Bill in. It's kind of reminiscent of even though it's not a dollar store, 99 cent store from back in the day that the two of us would trade together and and talk about and we'd both go and shop at that store.
Uh let's go to the um weekly for a second. I was just thinking, you know, the the tight action here, you know, three weeks tight uh recently and uh still holding pretty tight. Exactly. And the history of being tight in a lot of a lot of three weeks tight. Yeah. Yeah. And it's kind of how we do it because it's a one a band of one and a half% because we didn't do it in ATR terms. But even if we did it in ATR terms, we would still have this is as tight action. And if you're dying to buy something, this is still still a CC caliber stock because look at the earnings record. It's okay, but not great. Go down to the quarterly numbers. Okay, but not great. Um, you know, it's not even 20% uh earnings growth, but it's accelerating up to it. Sales are mediocre and at least very stable. You know, it's got the earning stability of six. Um, so not great in terms of high numbers, but 15% annually isn't uh, you know, isn't terrible. Yeah. So it's an it's an okay stock and something you can kind of sleep. Like if I had a bunch of these in my account, I probably wouldn't wouldn't have gone to cash. I would have just said, "Oh, I've got some slow pokey." But I had a bunch of heat in my account. So when you've got heat and you're going into something, just backing away makes sense. U, but I I think this is okay, but still a Caliber stock and why I went with C's. Yeah.
Uh, no, absolutely. Um, and then let's go ahead and also talk about Senora uh which again this uh the the the health care space, the medical space um was one of the areas that did relatively well and again you take the indexes out of everything and this looks like very normal action um and relative strength improving. Yeah. and it looked very similar to MCK and um I don't know if there's um a merger or something that I just didn't get a chance to uh look at the um look into but the trading action was similar. So definitely do some research on this one before you consider uh buying it because I didn't get a chance to do that but it does look disconnected from the rest of the market and that is your goal right now. You want non-correlated assets. So that can be sectors, it could be individual stocks, but you want to find things that aren't linked with what the NASDAQ is doing because you don't know what the NASDAQ's going to do. So, but you know what this should do? It should move higher because it broke out of that base, pulled back in kind of in a sloppy way, but is moving up in a bad tape. So, it tells you there are some buyers there. Now, the downside is if the market turns and rips, these things are probably, you know, become dead money and probably come back in. Let's go to the weekly on this one. And yeah, just a like, you know, RS line isn't that great. Again, a Caliber um stock just kind of holding holding in there. I do like that earnings line, you know, a stable earnings line um in there, but again, I did not get a chance to do the research on this one. So if someone's screaming like, "Oh, they're getting bought out or they're buying someone or whatever," wouldn't surprise me because it it does look a little funky in there. Yeah. Another one where again 15% EPS growth rate, you know, not bad, but uh not not of the highest uh quality that we usually insist on, but that earning stability of two, uh remember the lower number the better. It goes from 1 to 99, so two is almost as stable as you can get. Uh so but uh a lot of tight areas so you you're not going to expect to blow the doors off of your portfolio with uh with with a position here.
Um one other one I'm going to throw at you, Mike, of course a lot of this was centered around China and their kind of control of rare earth metals. And so when you look at something like MP Materials that has, you know, been been one that we've been talking a lot about on IBD Live, um one might say, well, gosh, you know, this this should benefit, right? And it certainly did today. Um, was up 8.4% but well off its highs. So, um what what what's your take on something like this? Is it just the news is too much, too much volatility, too much unknown to give this a shot?
Um, well, look, I did have it. This was one of the last things that I sold today. I've been trading it off and on for the last month or so and been just frankly getting chopped up in it because it seemed like such a compelling story and with the government getting involved and everything that I really thought this was going to be like a Bethlehem Steel type of move and I was wrong. It it just hasn't played out. And this base on that day that it went up to the 8223 it I thought this was off to the races and it was just going to go and then the very next day how much was it down like 9% or something? It was horrible because I was in it 11% 11%. Wow. I mean that that's not normal or natural. And again go back to I think the greatest book ever written really in about the stock market Jesse Livermore's How to Trade in Stocks. Well, reminiscence is right up there as well as, you know, of course, Bill's book, but I I think Jesse Livermore's takes is the best one.
Um, and uh, his real thing, he didn't use this phrase this way, but normal and natural is what I got from him of like, look at the action. Is that normal or natural? It wasn't. And today would would have been a day you would have expected it to be at $90 given given the the news. So I think probably the players are in there going, "Wow, if if this tweet turns around the opposite way, we it could be down 20%." So if you're playing with this, you are playing with fire. It does have this wedgie feel up over the last week where it hasn't really shaken, you know, shaken people out in a in a big way. It's kind of gone up. It just doesn't It was a reluctant I was reluctantly selling. I think it was one of the last things I I was still holding on to a piece of it. I'm like, nah, you know, I could wake up on Monday and see this at $60 or $100. Yeah, just step aside for a second. If it tightens up here and forms some sort of structure in and around 80 that I can trade off of, um, that's great. But right now, I don't know that I'm wrong until it goes down to the 50-day. And how far is that 50-day from here on a percentage basis? Uh, let's see. About 12.3%. Yeah. So, you know, I already did that. I don't want to do that again, you know. So, um and and and as you said, I mean, that's it's not like, oh, it's going to you can't count on it drifting down there very nicely. Uh that can happen in a day or in in minutes, you know, with with the wrong tweet um or news news item. Um, so, yeah, it's it's just what's your edge? How do you get an edge on that unless you've got inside information, you know, which that's illegal. Don't do that.
Um, okay. Mike, are you ready to share your your your screens? Yeah, let's do that. Okay. I'm going to go ahead and stop my share, turn things over to you, and uh we're going to start with kind of a a stripped down version. What you got? Um, hold on one sec. This is always the hardest. I can see your IWM right now. Okay, perfect. Okay, so here is our Bob Weer. take a step back, look at the bigger picture, look at the weekly chart, and um I'm going to ask you the easiest question of the session. What is good about this candle? Fullbodied. So, fullbodied water. Um, look, a candle like this is terrible. Let me just blow this up even more. It gives you a clear expectation that it should go lower with a big pink bar, meaning it closed lower than it then it opened up here, closed down here with a tiny top wick with no bottom wick. But things can, you know, this was a terrible looking candle over here and then the next thing we had was an inside. So that would be, you know, good if we can just get an inside week um next week. But uh you know it's like kind of you know a lot of these bad candles in there. Sometimes you can just pull out a a good candle the next week but given this it's a it's a warning sign. So what we're doing right now going through all these charts is just trying to paint a picture to us of what's good and what's bad in each one. Same thing here on the NASDAQ. Same basic feel. an outside bar or an outside candle on a weekly basis means even more than on a daily basis obviously. So, we traveled above and below last week's high and low and closed uh below it. Let's take a look at the IWM. Man, that looks bad because you're looking at that spread versus all the other spreads and it seems like it sticks out. Yeah, this was the other one that looked like it. Um at least it little had a little bit of a wick off of the bottom there. Um, but let's hope for something like that. But, uh, hope isn't a great strategy. All right, we're going to go with our um, uh, moving on to our regression. So, let's start off with SPY. And again, we have these in here uh, starting off on May uh, 12th and going out 50 trading days, which was uh, July 23rd, I guess. And you can see that we've now broken um our uh one standard deviation in a big big way here. And so this looks like, you know, it's going to be thrown out. It it had been hugging this rather than bouncing up there, which had been bothering me. We're going to talk more about that in a second. But this looks like it's um it's broken. And and usually we say, "Oh, it can spend a little, you know, a little bit of time below that solid green line and still be okay and come back." But I guess there's a distance thing, too. There is a distance. This is an art with a science. It's a blend of the two. And I would want to put an actual number to it. So, if we were to bounce right back Monday or maybe Tuesday, I'd say, "Okay, maybe if it gets back in that line right away." Okay, it's back on, but it looks like it's broken, frankly. And uh let's take a look at that was the composite and IWM. This is just breaking now. This is using I have a different date on here. This is using the the time that it came down on 1st and going out to today, which I think you had told me was uh 50 days today. Okay. So, this is uh breaking through. It's still it's still alive. We wanted to get back above this line here. So that would be around uh 242 and change like two let's call it 242 and a half would get you back where you'd be gunning it if that happens right away. And we'll see how that plays out. And now last week um or for the last couple weeks I was toying around with uh changing the where the regressions of where the anchor points on there. You never want to change things mid, you don't want to change a strategy or a style mid trade. Uh so I was just saying, you know, I'm going to do it and I'm going to observe it and study it. Uh but I'm not going to really use it. But I did want to put those in there for SPY. I was using an alternative of also that August
1, which um with the end date of today. So 50 trading days because it seemed as if this was a new trend like we were let me go back to the old one. Um, this was the old spy using the anchor points of of uh in May and in July and you could see that you know at this point on August 1st it just started a different type of slope. We were going at one angle now we were going at a different one. And I'm just trying to find some rules because I don't want this to be where when I'm bullish I do it and I'm bearish I do it a different way. That that is a recipe for disaster. So I want hard and fast rules. But I thought I'd share I talked about this at the um with some folks at the uh the event in Vegas that we had last weekend um which was a ton of fun the founders IBD founders club. And so I just wanted to share it this even with this then it's it's breaking as well and that's a pretty bad break and I did it on the composite with those same dates. So with this it could just come right back in here and move up and then if this is our new channel but again this is just an observation not something we're using for a real analysis. Hopefully that didn't confuse you. If it confused you just pretend like you never heard it.
Um, now let's uh we'll go to our 50%. What was that? Men in Black or something like that with a little like device. Yeah. Yeah. Just uh Yeah. Do do the flash, right? We'll do the flash. So, this is our 50% retracement. I was trying all sorts of different ways earlier today. Um, this is before it got this ugly that I put this in with the um September 25th low and then the high from this week and seeing if we were going to be able to stay in the northern hemisphere. Um, when I did this, we were in the northern hemisphere. Um, and now we're not. We're all the way through the floor. So, that is, last time I checked, not a good sign. And same thing with the composite. This one, we're down to the floor, but still we're not in the northern hemisphere. So, we want to at least get above uh 22,650 and change. This is how I look at to just keep it very very simple. In fact, let's go back to spy to on a the most simplistic level. Whatever news we get over the weekend, if it's truly good news, we will get up to the 66418 and higher and start living in that area. If it's if it's not really good news as the market interprets it, we'll just be in this area or lower. So, that's how I like to use that.
Um, let's see if I have the IWM. Same thing for the IWM that came all the way down to its floor. We'll go to our next one. This is our levels, right? Let's see. Oh, for SPY, I decided to take a bunch away just to make this as clean as possible. Um, and so with this one, we just have our high up there. We went through this low, um, which was you could either use the low from the 25th or you could use the low from the 17th. We're through there. And then our next key level would be uh down here on August 1st, which is a mile below. There are other levels in there, but again, I was trying to simplify this. And then the NASDAQ um same thing. We're down to this level that you could either use the 25th's low or you could if give it a little bit more room down to the 17th low. Then um our next one, this one is really debatable because you could have multiple lines in here. you on this I was using the low of the 5th, but you could also use the high of August 13th and they're both in the same general area. Or you could have multiple lines and then a few other areas like the the low of the 20th.
Um, hopefully I don't start coughing. Just one sec. Live show coughs and all. Yeah, someone um someone got me sick in Vegas. So, shame on you. Been sick all week. You know who you are. Yes. No, I don't know. I forgive you. So, um here on the IWM, the the low of the 25th was the key level there that I marked and we're we're down there. So, we want to bounce up from there. I'll go out to our next thing. This is our very basic. Oh, you know what? I have one before that. Here's our one with all of the moving averages. This is the new one with all of um the Fibonacci levels. So from a three to a five to an eight to 13 to 21 35 Fibonacci moving averages, not Fibonacci levels. Yes. And um all exponential. And I just do this as a way of seeing are they are they trending the right way? Are they stacked properly? And when you start to roll the short-term ones start going through the the intermediate term ones. And that's what we're seeing here. And it's just a visual that I like to to have. And I've been doing this for a long time this way, but just not really sharing it. I thought it was time to share because sharing is caring. Same thing on the composite. And let's take a look at the IWM. That one looks a little bit ugly on there. And then anything to say about that while I cough.
Um, no. I mean, you know, basically I think the theme has been very clear that there's just a lot of ugliness. the chart the charts look ugly levels you know uh not just gone through the levels but like zoomed past uh you know a lot of these a lot of these areas all in one day there's the quick and the dead so you've got spy here which is my favorite one the simplistic way of looking at things and simpler is better of just the 21day on there and uh we sliced through it like it was um vegan butter and let's take a look at the composite That's it. Same thing there. Same thing on the IWM. Same thing on the RSP. Same thing on basically everything. Okay.
So now let's stop sharing that and we are going to share our Webby RSI. And one of the things about the Webby RSI, of course, uh this is not the RSI that a lot of technical analysts know. This is the real simple indicator. Just basically where are you at in relation to your 21-day moving average line and your 10day moving average line. Um, one of the things that you've been noting is as much as, you know, people have been talking about, oh, the market's extended, we're due for a pullback. Even my wife was telling me yesterday, you know, I'm hearing that the market's, you know, due for a pullback. And, you know, whenever whenever my wife is coming and telling me, you know, that means it's really really out there. But according to a lot of your metrics, it really hadn't gotten that extended. It it really hadn't. And I'll just tell you a little secret in the industry, what people do. People always say, they look smart that way. Oh, we're extended. We're going to have a pullback of, you know, we're gonna have a pullback sometime, but we don't have to have a pullback. So then they're right no matter what. Like take a stand, man. Which one is it? Like that's what everyone always says. And then, you know, they'll say, "I'm waiting for a pullback." A pullback happens, they don't like the pullback, and then it moves up. Then, oh, it's too extended now. We'll wait for a pullback. So, just make a stand if there's a stand to be made. Sometimes there's not a stand to be made where you just don't know or you have to wait. In this case, we have to wait because we no longer have a webby RSI. It's off the charts. And that's the the reasoning there is this is a metric down here at the bottom of your low versus your 21 day. This little histogram here. Now on today there's no histogram because your low is below it. Um, now we'll start getting a if we really start coming down, we will start getting an orange one on here and this is where your high is underneath your 21day. And then we will talk about that in the future because that that's a different way of looking at it. And I don't want to say the word oversold, but you can at least get a feel for what's normal and natural. So when you extend it to the downside, extended to the downside. I like that. Okay. So when you um when you are looking at this and you don't have an indicator, it's giving you feedback, there's a warning sign because this is a trending indicator that I designed for trends. And without something there, it's telling you there's no trend. So if you're a trend follower and this is your trend, well, you're you're waiting for a new trend.
Um, uh, let's take a look at, uh, the NASDAQ. Same thing there. You know, I think as Mick would say, he's waiting on a friend. Um, and then let's take a look at the IWM. You're too young for that reference. Okay. You don't you didn't catch it. That's fine. Um, I'll explain it to you after. So, here's I mean, I'm assuming when you say Mick, I'm assuming you mean MC Jagger, but I don't I don't recall the I don't recall the song. Oh, shame on you. Oh my gosh, what's wrong with you? Okay, so here's IWM. Same thing there. Let's move on to our Bob Marley um uh let's see, take a step back. Well, not really step back with this one, but it is looking at it versus the 18 um month low. And uh so this is to measure your um where you are versus your highs you um over an 18th month. I I just totally misspoke. I'm sorry. I'm sick. Um forgive me. So this is just measuring how far off your highs you are in terms of ATRs. The green area is 0 to four ATRs. Yellow is four to eight. More than that is the red zone. So we're still in the green zone. But why I like to use this is it tells me did it break character or not. And you can see the little moves down and typically they stay when it's healthy. It'll stop around the same general area. So it stopped here. Then it stopped here which was about the same area. Then it stopped here which was about the same area. Now, this time when it should have stopped right in here, it didn't and it just kept blowing past it, which is now down in and around the levels a little bit worse than the August 1 as ATR's off our high. So, the good thing about that was we snapped right back from there. So, we do need to keep an open mind that the last time we were down here using this one, we bounced right back. So, that's actually our first encouraging um signal. We've seen a ton of different charts sliced a lot of different ways and this was our first encouraging one.
Um, let's take a look at the NASDAQ and sorry, same basic thing here. Um, this one's been a bit more volatile and coming down in, you know, close to the four ATRs off our high a couple times and so we're now down in that area. So again, a little bit encouraging with this is that it's more normal and natural from this standpoint. Not ideal because it's, you know, volatile, but you can't say that it's broken character looking at this when we go underneath there than it would be. Let's take a look at IWM. Well, that's a little different because it's been moving up. Let's take a look at the RSP. Um, again, this one isn't as bad as it was on August 1 yet. So, we're ending on a little bit of a encouragement. Um, it wasn't planned, but it is what it is.
Well, and and so let's let's kind of again for for guidance going forward. And again, you know, we're we're not giving buy recommendations or sell recommendations, but I think it's safe to say that this weekend is a good time to make your plan, right? And um you have to have a plan for both ways. You know, there's ton of people out there that I'm sure are going to be saying, "Oh, of course we're going to get a bounce. You know, this is overdone." And there's a lot of people saying, "Oh, well, this is, you know, just the beginning." Um, and look, there's also a difference in time frames, right? You might be looking at, okay, we could see some short-term weakness, but long-term, I'm bullish. You know, there's still a whole AI um, you know, roll out that is in its infancy in a lot of ways. So for for next week and or maybe the weekend plan, what should people be looking at? Well, you set it up nicely. So what I would do is do a plan, but be real with who you are and your style. If you're an active swing trader, you're probably very light or out. If you're um very slow position trader, you probably did nothing today. Like very slow position trader. But if you were like a Bill O'Neal position trader, you would have done a lot. He would have done a lot today. I know him. You used to see his sheets all the time. If I didn't do a lot today, he would have been very upset. And that was orthodox position trading that we would do. Um, not swing trading. So, you want to make sure that whatever you did today or didn't do was in line with your style of trading. Maybe you were tied up or traveling all day and you're watching this over the weekend and or you're a surgeon or a school teacher or a policeman or woman or something where you're tied up all day and you can't take action during the trading day. Um, and you're looking at this over the weekend, you're going, "Okay, what do I do?" The reality is you can't go back in time and and change anything. You can just do going forward and have a plan for each one of your stocks. It's very important. rate each one of your stocks now. Um, in fact, I would do it over the weekend because you have a clearer mind. I always said do your weekend work on the weekend because you get a Sundays are better than Saturdays, but if it has to be Saturday, do do it then. And gives you Sunday gives you a little bit of time mentally to kind of reset and then look at the charts and go with less emotions. Go, okay, where would I expect this to come in and where is it abnormal? and put some plans there. And it's not an all or nothing. You, you know, you can break up your trades now that it's free commissions. You can break that up into, you know, 10. There's nothing wrong with that. Go, okay, I've got a hundred 100 shares. I'm going to sell 10 here, 10 here, 10 here, 10 here. And you can do automatic stops. And, you know, if you're if you're busy, it's just set up for you. You can do good till canceled. So, it's rolls over to the next day unless you make a different decision. Yeah. Yeah. And don't forget about those obviously.
And so that's probably the best for people who are indecisive. Now I know there were a lot of people that got caught in the bare market uh at the beginning part of the year. And I've seen a lot of these people on on Twitter and elsewhere who sat through that because and they shouldn't have. It was a bare market. you don't sit through a bare market and they got away with it and feeling really bright up here and didn't take any action back then and just saying, "Okay, I'm going to just buy every dip." Man, please don't do that. Like, go back and study history. Study the 90s. I think this is like the 90s. I think AI has a ton to go. I think we're, you know, we've got a huge bull market ahead of us, but in the short term, you can have little bears, you can have little intermediate corrections, you can have big bears. Look at, you know, study 1982 to um to 2000. That was a major bull market. And look at all of that time. You're not going to just want to stay with your gas pedal down the whole time. You would have your head handed to you. And you know as well as I know how bearish Bill would get along the way. Maybe you could this is a good time to tell the for you to tell the story of 1999 and and the letter that he wrote and uh what happened after because it's very important for people to understand um how he really was.
Yeah. I mean and it it really just goes to show how quickly he could change. He wrote a bearish letter to 500 clients about how uh the summer of 1999 institutional clients. Yeah. So this was not um you know this was you know Fidelity this was you know the big institutions and you know he stuck his neck out there saying I I am very bearish. I think that um the '9s have been great but I think it's over. And then September rolls around uh or October and there's a follow-through day. And literally like maybe a week or two after he told me he sent that letter, I was driving him to the airport and he's like buying all this stuff and I'm looking at it. I'm like, "What, you know, what's going on?" And he's like, "Well, you know, we had a follow-through day. It's it's" and there were setups and there were things to buy. And if he had stuck to his guns and said, "Well, no, I sent this letter. It would look, you know, I would look silly if I um didn't stick to my guns here. I would look wishy-washy." he would have missed out on a huge opportunity. Um because between September and October and March of 2000 uh the I it was it was just a huge huge move. Um you know Qualcomm and you know what have you there was just so many stocks uh that doubled uh or more in that short period of time. Wouldn't you say he probably made more money money not percent in that time from when you were taking him to the airport to the March top than in any other time during his career after he had flip-flopped from being super bearish because the market was giving him those signals to being super bullish because the market was giving him those signals. I mean over that period of time maybe um but it's you know it's tricky because right 10 years later and the accounts were all bigger uh so it didn't take as much it didn't take as much to make the same dollar amount. Uh so that's true that's fair uh you know very interesting comments going on. Uh there's a number of people in the YouTube comments that are saying hey take care of that cough uh Webbby. Um, someone was talking about how they were at the um uh the economic conference that we threw uh what was that 25 years ago. Um uh just asking it was Larry Cuddlo I think that you were thinking of that was one of our uh speakers there. Um a lot of people are thinking this is a a whiskey a whiskey type uh weekend. Um just in in terms of dealing with the market. Um, a lot of people saying a double. Um, drink drink water if that is your solution. With lemon, you know, with lemon and um Andrew Huberman has a really good um podcast out on what alcohol does to you. And I'm not one to preach, but but just look into it. Yep.
Okay. Well, uh you've got some weekend homework, folks. Uh thank you, Webbby, very much for your analysis. Uh that's going to wrap it up for us this week. Uh again, we are looking forward to uh what happens next week in terms of whether on the upside or the downside uh how how to play it and uh again it's about protection uh but at the same time being open to opportunities if they do present themselves. So uh hope everyone has a great weekend. Get to that homework and we'll see you next week. Take care everybody.