AI Stocks Lead Market Bounce Into Huge Earnings; ATI, Micron, Datadog In Focus — Stock Market Today

[00:00:00] Speaker ?: *music* [00:00:30] Alyssa Coram: Good afternoon, everyone. It's Alyssa Coram and Ed Carson here with a look at the stock market today for Tuesday, July 21st. And we saw a big bounce today, Ed, led by an AI recovery ahead of some pretty huge earnings this week. [00:00:52] Ed Carson: Yeah, big earnings coming up. But I want to take a look at ATI, Micron, and Datadog. [00:00:57] Alyssa Coram: All right. Some notable things to discuss there. We'll check out those charts. But first, as always, a closer look at the major indexes. We're going to kick things off with a look at the S&P 500, represented by the VOO ETF here, up nine tenths of a percent on the day. Meanwhile, the NASDAQ had a stronger day, but in a weaker position. The NASDAQ composite up one point three percent on the day. The NASDAQ 100 also had a strong session here, Ed, with a focus on tech today. The NASDAQ 100 up one point nine percent. The Russell 2000 also had a good day. IWM up one and a half percent. And blue chips positive on the day. The Dow up about seven tenths of a percent or so. So the S&P, it's right at those moving averages. [00:01:53] Ed Carson: Yeah. So, yeah. S&P back above the 50 day and 21 day lines still below those short term levels. So I would really like to see it get above that, especially given the volatility that we've had. You know, want to see that we're not in this chop fest where a good day or two means a down day or two afterward, you know, as opposed to the uptrend kind of mentality. And we have so many big earnings and so much news out there that adds to the risk that you could have some up and downs. But, hey, it's nice to get back above these levels. You know, while AI led, there was a lot of strength out there. You know, really, and with oil and with Treasury yields rising, I mean, you know, there was a lot of headwinds and the market said, no, we're going. We're going. So it doesn't mean that maybe tomorrow that may not occur. But those were, you know, pretty decent moves on both of those things and headwinds for the market. The market said, no, we're going to go. And so that was positive. [00:02:50] Alyssa Coram: Yeah. And here's a look at the RSP hanging on around that 21 day line was a little weaker than the S&P 500 today, which we know it is over time. This uptrend, though, is still intact. OK, so that's a look at the S&P. Let's take a closer look at the Nasdaq composite, because this is a good proxy for a lot of the stocks that us growth traders like to trade with that tech bent. We're still below the 50 day line, and that has now flatlined. You mentioned the recent highs. So we do have that level to keep in mind as well as the 50 day 26,000 that round numbered there and the 21 day line. Will that be resistance or can we conquer that level? Also want to mention, Ed, I was doing a little studying of the late 90s, looking back at the Nasdaq today, since we do some of that precedent analysis here and there. We've talked in recent shows about in recent weeks and months how that was a choppy period. When you look at the day to day, you know, parts of that uptrend. Right. Sure. You take the step back and you think, wow, the late 90s. We were rocking and rolling. And I think one thing to note there is even with the chop, we continued to make higher lows the whole way. So I think that that's also something for traders to keep in mind is we could continue to see a choppy uptrend. We could chop higher, you know, and see the leadership baton handed off from group to group. But can the market continue to make those higher lows? [00:04:32] Ed Carson: Yeah. And it has done so far. It's come close to undercutting, but it has not. And it's interesting that Nasdaq had the strongest or maybe they were essentially the strongest, you know, action today. It was the only one that really didn't prove anything. Everything else went above some kind of average. I guess it went above the 10-day line, but honestly, that's just not enough. Yeah, we need to get above these levels here. The 21-day, the 50-day line, and then the short-term highs. Get above all of that. David Ryan made some really good points about how the Nasdaq and a lot of leading stocks coming up to their 50-day line. And some of them actually peaked above, but you want to see decisively. And, you know, just that because this is also where you could just roll over. You know, you could come up to those moving averages and then roll over. So this is not the challenge. You know, we haven't, you know, really hasn't done yet. Google Earnings tomorrow is sort of the start of that first massive earnings. And it's not so much the earnings or even the guidance. It's the capital spending outlook that is so huge. And then we'll get all the other big hyperscalers next week. But that's why Google is just far more important than anything else this week. You know, even though there's some really big reports. Yeah, so that's just going to be really important to see how it does. If the Nasdaq can blow through those things, yeah, we could be another thing. For the first time, we've had, we'll have had, you know, some kind of space to have to form bases. Unfortunately, it's been so volatile, the bases are often choppy. But there will be things to buy, things that you were like on the edge with, you know, you can finally maybe those core positions can then continue to move higher. But yeah, it's a really important time through the next, through next Thursday, I'd say. [00:06:13] Alyssa Coram: Yeah, because we will have to see what the reaction is like for a lot of these hotly anticipated AI reports. I think investors will have some knee jerk reactions when we see some of the CapEx guidance. Will, you know, will it be good, bad or ugly? We'll have to see mixed bag, what the general consensus is and what the ripple effects are across the AI ecosystem. So I know you are all over it and as our news editor, as well as the tech team, we're going to be covering it on the show on IBD Live as well. So a big couple of weeks. Absolutely. Okay, let's get quick thoughts on blue chips and small caps. Here's a look at the Dow. [00:06:55] Ed Carson: Both of them went above their 21 day lines and that's nice. It's good to see they're not that far from highs. I mean, it's, this is also just showing you, you don't have to be just the NASDAQ. There's a lot of parts of this market. I mean, RSP didn't do that much, but it got above its 21 day line. It's pretty close to highs. So, you know, it didn't have the big wow day, but also it hasn't had the big ouch days in that same way. So a lot of the market's doing well on that. And, you know, some of the stocks that are flashing buy signals for the most part are really not in the AI sector right now because they've been hit so hard. [00:07:27] Alyssa Coram: Yeah, and ATI, one that we will look at. All right, let's take a look at some sectors before we move on. Ed, SMH doing some repair work here up four and a half percent, but we have that 50 day line still to conquer here. [00:07:44] Ed Carson: Yeah, I finally got out of this last week and that's, you know, that's okay. I wish I'd had it still now, but we'll see how it goes. Just like the NASDAQ needs to get back above the 50 day line decisively. [00:07:55] Alyssa Coram: And, you know, you can always buy it back, right? If it does make that decisive move. Absolutely. [00:08:01] Ed Carson: I mean, I bought it at the time because I wasn't sure what to buy. I think there might be more things to buy, but I'll definitely consider buying SMH in part because it's ATR while it's up at 5%. It makes big moves like it did today, but it's not 10, 12, 15% like some of its components. Right. So there's something to be said for that. [00:08:19] Alyssa Coram: Exactly. Great point there. Okay. IGV software are still in focus as well. What do you make of what's going on with software? [00:08:29] Ed Carson: I mean, software in general still has a lot of work to do, but it was interesting that some of the leading stocks fell back. Now, some of that was just constructive. It just sort of depends. And we'll talk about it with Datadog. [00:08:39] Alyssa Coram: Okay. And then XBI, the biotech area, we saw a lot of money flowing there, notably in the mid-June timeframe, a pullback since then hovering right around a key level. But it still feels like there are a lot of biotech names that are holding up, holding strong, maybe extended, maybe presenting some add-on entries or even forging new buy points. [00:09:03] Ed Carson: I mean, this is why you don't buy after when things are extended and also why you try to find the early leaders. Because if you bought the early leaders, they kept rising and now you have a cushion in most parts. I mean, there's always going to be those that aren't. But if you bought some in the last couple of weeks, well, you might have had to sell or you're just sort of like, oh, I don't know what I'm going to do with this name, even though XBI and a lot of those names look great. But just in general, when things are moving, you want to try to get onto them as soon as you can. [00:09:27] Alyssa Coram: Okay, let's take a look at an actionable or potentially actionable stock today. And that is ATI in the Aerospace Defense Group. Up almost 6% on the day, Ed. Rebounding off of the 50-day line. Some nice support there earlier in the week. [00:09:47] Ed Carson: Yeah, off the 50-day, off the 21-day line, breaking the trend line above short-term highs. Sort of a shelf, you could almost argue, toward the prior base, you know, that was sort of there. It's not really showing up, but you can sort of see that whole area there. And so, yeah, I think there was definitely actionable. This was added to leaderboard today. So, yeah, this one has shown strong growth. It's been a real winner over time. It isn't necessarily going, "Wow, amazing," but it's like, you look at the whole year and it's like, man, it's sort of like when you jog for long distance. All of a sudden, it's really impressive as opposed to sprinting and then taking breaks for long periods of time. This one just keeps on moving up. Also note that CRS, which is somewhat similar, sort of specialty metals, very similar action today, sort of bouncing off the 10-week line, breaking trend lines. So, you know, that's nice to see in that regard as well. So, yeah, and CRS has earnings soon. But, you know, ATI just looking very strong. And I don't believe this has much AI. It probably has something because it's specialty metals or used in turbines or something, because everything's AI. But this is more of an aerospace defense play. Interesting. [00:10:59] Alyssa Coram: Yeah. And contrasting that with CRS, I'd imagine one of the appeals for ATI today over the CRS is just with that earnings coming up soon, potentially, although who knows if that'll have an impact on ATI, the CRS earnings. But strong bottom line growth from both companies. And I think also maybe in terms of how extended the stock is, right? It does look like. [00:11:26] Ed Carson: Yeah, I think ATI is better. Yeah, I agree. ATI looks better because it's still in an uptrend, but not feeling as extended. But, yeah, it's just nice to see some peers showing similar action. But it's always, you know, always try to pick the best one. And right now, I think ATI looks the best. [00:11:42] Alyssa Coram: All right. And let's go on over to Micron. Are the memory plays making that big comeback? Well, they're trying to. EMU up over 12% today. And it did close above not only the 50-day line, but the 21-day line. So, that is notable. Ed, I could totally see some traders wanting to take a shot with this one today. It still is questionable, I think, in terms of just the severity of the decline. And thinking about how bases form, right? Seeing it shoot straight back up to highs. Is it the most likely scenario? I'm not sure. It did go quite vertical pretty recently. So, what are your thoughts on this one? [00:12:33] Ed Carson: Yeah. I mean, I'd feel more comfortable if it were a different time period. But, yeah, I agree with everything you're saying. But what pushes me against not taking the action on it today was just Google is coming up. And a lot of its peers are coming up. Seagate reports next week. Not 100% competitor, but it's in memory. That's right above its 50-day line. And then SK Hynix, which just came up. I'm not sure whether it is in Korea where it's above its 50-day line or not. But in the U.S., it's sort of forming an IPO base. That has earnings in a week as well or so. So, two big memory plays with Google and all the hyperscalers. There's a lot of risk. I mean, Micron could be up 30% next week. I mean, over the next week. I mean, it would not shock me. Could it be down 25%, 30%? Not really shocking either if the market, if those other things don't come in right. So, and it's even now. It's like on a weekly. It's still an inside week. So, in a way, it hasn't really done anything. I mean, it's done something. But, you know, in a way, it hasn't really shaken off what's going on. So, I think this looks the best of the memory plays. It was really positive action. I might have been tempted to make a mental health buy if it weren't for the fact that there's just so much coming in that could affect Micron over the next week or so. [00:13:52] Alyssa Coram: Well, we'll have to see what Google earnings are like. And I think just from the technical perspective, it does seem like a thousand, that round number. Yeah, that looks really nice. That could be a good area to look at. And then, you know, you manage risk. Yes. Is risk heightened right now? Yes. So, you do have to be aware of that. But if this does fit your risk profile, have a stop, right? So, we'll have to see how all the AI news impacts Micron and the other peers. Okay. Moving on. Datadog. You wanted to highlight this one in the software space. Still working on the right side of the base, right at the 21 day. Yeah. [00:14:34] Ed Carson: On a weekly, it already had a handle. But today, it formed a handle on a daily chart. So, it's slightly different one because this is daily. On a weekly, it had a slightly different one. Either way, you know, as me as a non-investor, this all looks fine. It's setting up. It's pausing after a big run. It's sort of nice that it's doing this sort of longer. And I wish it were a little bit cleaner. Okay. But still, all in all, it's holding up reasonably well, reasonably tight, given all the kind of craziness out there. Yeah. The only thing is, if you bought the breakout, say, on the weekly chart, you know, you're down a fair amount. You're down four or five percent. This makes it tricky. It just shows you how it is difficult to make new buys, even when the stock is still doing reasonably well. I mean, but if you bought, you know, when it poked out to sort of short-term highs last week, as it did that breakout, now you're down, I don't know, five percent, six percent. It's getting into, it's sort of getting into the sell zone area. So, that's just tricky. And it just, you have to listen to that. And maybe, this is definitely a situation where you might be forced to sell, and then you can buy it back, you know, if it does work out. Because it's not like, I think this could definitely work. I think this stock could definitely work. I don't think it's broken by any means. In some ways, you could say it's almost constructive. But, I mean, it's just, you have to manage that risk. And if the losses pile up, you have to listen to that, but definitely watch it. And this is one of the, a lot of leading software stocks had days like this. This one actually has a handle now after on a daily. So, that'll be, in some ways it's better than before. But, yeah. [00:16:11] Alyssa Coram: And it seems like, Ed, if you're going to buy strength for something like this, when it did have that handle breakout, like you were talking about with the lower handle there, looking at the lows in the handle, right, maybe a decisive close below that would make it feel a little more broken or at least signal maybe it needs more time. Maybe it'll, it'll have a handle shake out down to the 50 day. Who knows? But if you're buying it in that position, maybe size it to where you can withstand down to a decisive close below those relevant lows, perhaps. All right. So, I couldn't see your, I wasn't, I was looking at the camera. I wasn't looking at your face. So, all right. Let's go to IBKR earnings out after the close. I'm seeing a whole lot of movement in the stock yet. Yeah. [00:17:03] Ed Carson: It's wavered a little bit. It seemed, you know, beat views modestly. It rose today earlier as Schwab reported. Schwab didn't really do much, but IBKR came in. So, there's, you know, that, but IBKR sort of, you know, yeah. So, that one actually reversed lower. It had, it started off okay. But IBKR, it has an emergency, bouncing off the 50 day line. So, you could have been doing all that, but it sort of came down abruptly. At the end of this week, it's set to have a flat base. Assuming it doesn't break out or just have some massive collapse. So, that's another way to be looking at it. So, if it gets above these levels, this is just showing, you know, it's been acting pretty well. After that last breakout, it's been up and down, up and down. But the ups have been, it's consistently sort of gone up more as along the way. Some pretty strong action. So, yeah. So, this one is setting up not, sort of seems in between the 50 day line and an official break. Yeah. But one to watch to see if it can get above there, you know, whether it's tomorrow or in a week or so. Absolutely. [00:18:04] Alyssa Coram: And then you mentioned Google. So, we can give that a little preview. Though, I know the actual detailed preview was with you and Lexi in earnings cheat sheet. Yeah. [00:18:14] Ed Carson: And it's looked a lot different over the last few days. I mean, it was setting up and we first looked at it, but there you go. Look, this one needs to get above the 50 day line. But the real issue is, and it could be that they say something, we're going to double our CapEx. And that makes Micron and all those AI plays rally. But Google sells off. Yeah. So, we don't need, it doesn't have to work where they're all together on this. But yeah, Google was sort of setting up. It's like, okay, maybe it's going to go on another run. But that was disappointing action. And this is when we talked about stocks or the NASDAQ running up to key levels and then getting turned back. That's happened a couple of times, maybe three times, you could argue with this stock. And it doesn't mean it won't work the next time. But, you know, this is why we really look to see those decisive breaks above. Sometimes the worst time to buy it is just below a buy point or just below resistance because you're hardly getting any reward from cheating. But you have all the risk of cheating, you know, if you just wait a little bit. And so, but yeah, this one's important. There's a lot of other names out there, but this one is just so impactful on the whole market. All right. [00:19:22] Alyssa Coram: Well, we'll see what happens. And speaking of having an impact on the market, we know SpaceX has quite a big waiting for such a young company. So, just a quick look at the chart here only because I guess you could say, hey, it snapped a seven-day losing streak. But we know the stock is not in a good position here, Ed. We were saying from the start how we wanted to wait for that IPO base. Never really formed anything. Perhaps an aggressive entry momentarily that traders got stopped out of around that $160, $170 level. But it's now below that, you know, those first days of trade as well as the IPO price of $135. The notable news here today is that we do have an earnings date now for early August. And so, traders might also be thinking about the lockup expiration around that. [00:20:21] Ed Carson: Yeah. There'll be earnings on August 4th. And then there's a slew of lockups. And the first one is on August 6th. So, there's different things. And some of it's based off of where the share price is. So, it gets confusing. Yeah. This one has repair work to do. But we'll also see, I mean, how much will it move on earnings? I mean, they're losing money and they're doing this and that and they're going to be gaining some revenue. But ultimately, given that so much of the valuation is on what it's going to do or hopefully will do, you never know. You know, it'll be more like, do people like what Musk has to say? It's a little bit like Tesla, which we'll be reporting tomorrow. And so, it's like, sometimes Musk seems to say the same thing. And sometimes the market likes it and sometimes they don't like it. You know, like, it's the same kind of thing. So, it really will be the market reaction. Will they care about earnings? We don't know. It's the first earnings report. Will we care about, will Musk wow them or will it be this way? Yeah. So, I think that's going to be really, we're getting close enough to that, that, you know, you'd have to be, even if we rebounded, you'd have to really be wondering what's going to happen with that earnings report. Because the first earnings report in an IPO is just so, such a wild card. [00:21:29] Alyssa Coram: It sure is. Great thoughts there, Ed. Much appreciated. [00:21:33] Ed Carson: All right. Thank you. [00:21:35] Alyssa Coram: And that's it from us for today. We will be back with more tomorrow morning on iubdliveinvestors.com/iebdlive for all the details. So, we'll see you then everyone. And then we'll also see you right back here tomorrow after the close.