Market Expectation Breaker; Apple, Eli Lilly, Cheesecake Factory In Focus — Stock Market Today

[00:00:00] Speaker ?: Let's get started. [00:00:30] Speaker 1: Hey, good afternoon, everyone, and welcome to Stock Market Today with IBD on October 16th, Friday. Ah, boy, it felt like more like a Friday the 13th, Mike. It really did. Yeah, it really did. It's like, what would you like to talk about this on this little scary, scary end to the week? [00:00:51] Speaker 2: Well, I would say we had an expectation breaker today on SPY, and so we'll go through that, but obviously the NASDAQ and everything else. It was a bad day and a bad way to go into the weekend. That's just the reality of it. And so as we go through, we'll get a little bit more context on things. I can't hear you. [00:01:16] Speaker 1: Took the mute there for a moment. There you go. Yeah, let's take a look. Well, you can see how the NASDAQ performed really big sell-off, so much for Thursday's bullish rebound to hold the 50-day line. I'm going to switch over to, on this one, auto-fit on a couple of these. That one doesn't look so good. So you can see how the NASDAQ and the S&P 500 sold off through their 50-day, 10-week lines. The Dow Jones held up, actually rose, but hit resistance at the 50-day, 10-week line. The small caps for, I'm going to show IWM for the moment. IWM really sold off as an ETF down 3%, cutting through a lot of things, lowest in four months, getting all the way back down to here. QQQE, you know, that did rise like the Dow, but hit resistance at that point. QQQE, different story, looking much more like the NASDAQ, falling by almost 4%. USO, nobody was talking about this because everything else was going on, but it did go up. It rose 10% to over $101 in the US. This is USO for the ETF. And the 10-year Treasury, and this was one of the surveys of the week. This one sold off, even despite surging oil, despite hot oil inflation prices, because of the AI financing fears that hit all those sectors. So that was really more of a reaction to things that were hitting the stock market. So a lot of negativity in that front. So why don't you go in and talk about your take on the market? [00:02:53] Speaker 2: Yeah, let's start off with SPY, and let's go to a daily chart and kind of walk through the lens I'm looking at it through. So, prior to this week, the NASDAQ and the Qs were leading. And then SPY was behind, IWM was in the doghouse and remains in the doghouse. So it was really the mega caps that were holding things up and on the tech side of things. So that changed this week, and we could zoom in a little bit more just for right now, just so we can kind of see what happened. So with the break on Wednesday that we have it, that was significant, but it did stop at the 50-day, which is what you want. But it sliced through what's very important to me, which is the 21-day, and you closed below it. So I always talk about a checklist on the upside, but you have the same checklist on the downside. So this is how it goes. It's just very simple. When you're going above or below a key level, whether it's a moving average or just a marked high or anything else of significance in the area of support or resistance, I do it in three phases. The first thing is, do you close above or below that? So in this case, if we're doing it in reverse, the 21-day, we closed below it there. So that's the first sign of a possible trend change down. Then the next thing is you want to get either, if you're moving above it, you're low above the line, or in this case, you're high underneath the line and closing down. So we haven't had that yet. We don't have the high underneath it for the S&P, but now we have another material closed below both the 21-day and the 50-day. So what are we looking for for that trend change to continue, meaning that we're in a downtrend on SPY? And that would be our high getting underneath those key levels, meaning our high getting underneath the 50 or the 21. And then three consecutive days where that high is stuck underneath and closing. Rather than have it be just one day making a big difference, that's how I look at it. Let's toggle over to NASDAQ for a second, then we're going to circle back to SPY. So on SPY, we're at step one there. For the NASDAQ, it's worse because our high is stuck underneath that 21-day. We have two days with our high underneath the 21-day and closing down. So one more day with that high stuck underneath there confirms, through my checklist, that you're in a short-term to intermediate-term downtrend. And that's just the reality. That's just, I try to keep it simple. So again, it's easier to think in terms of the upside. So if we were to move above the 21-day, or in this case, let's say the 50-day on Monday, if we got some good news, that would be your first sign. Then the next thing you'd want is your low to get above the 50-day and close up. That would be your second thing. And then the last thing and the hardest one is three consecutive days with that low above it. So we're, the NASDAQ is, you know, got one more day on there. So we'll see how Monday turns out. SPY, let's go over there. You would need a few days because your high isn't even underneath it. So we don't even have one day there. But what I dislike the most is what I call an expectation breaker. And that's something that we developed when I was working with Justin and Charles for the market school rules. We just noticed some things that you couldn't put black and white rules around. It was an art element where you have a clear expectation of something, and then that something doesn't happen. Now, that could either be a positive thing or a negative expectation breaker. Today was a negative expectation breaker for SPY. Why do I say that? Well, yesterday, we got support exactly where you should get support. And it wasn't just at the 50-day, which was the most important part of it. But you had an upside reversal after coming down for, you know, you had three red days in a row, then an upside reversal. That's very normal. Typically, you get two and a half days, so you would have wanted it the day before. But it was close enough. An upside reversal at a key level. But more important than that was the fact that if you look back to that marked low that we had about a month and a half ago, there, that was low one. And then you go up to the upside reversal about a couple weeks later. That was your higher low. And then there, we had another higher low. So a higher low with an upside reversal, that's, you know, that's an uptrend. Higher lows and higher highs. Now, we haven't undercut that low that we had the last one yet. But the fact that we were making a stand there, the bulls stepped up, and then they backed away today. Going into a weekend, it's just an eerie thing. And you don't like going – a Friday close is more meaningful to me than a Thursday close or a Monday close or anything else. Because lots of old technicians, like the two of us, because we're old now, we're about the same age, that they look at weekly charts. And some look at monthly charts. I look at monthly charts as well. So where you close for the week is really material. And closing like this makes the charts look really bad going into the weekend. We'll see if we get a flush on Monday. I mean, the best-case scenario would be honestly not a gap up, would be a gap down with an upside reversal. But that would be a lot of pain in there. But that is – that's the most you can really hope for. Because a gap up, you know, it would be – there would have to be some material positive news over the weekend, like really significant news, which you can have. You know, probably, you know, we would be looking for something from Iran or something because we don't have earnings coming out over the weekend. But most likely, the best case you can have is a gap down upside reversal. We'll see. We can't tell the market what to do. All you can do is interpret. Let's zoom back out a little bit on this to kind of see where we're at. So that's in the very nitty-gritty, like kind of short-term stance of it. But if you're – if you don't actively trade and you just kind of look at things slower, okay, well, the 50-day – we're still well above the 200-day. The 200-day is in an uptrend. 50-day is in an uptrend. And, you know, the 21-day is kind of right there at the 50-day. You want them kind of stacked nicely. Really, you would prefer the 21-day to be higher up than where it is versus the 50-day. But if you just look at this, it's a base-on-base-on-base using the pattern wreck on there. We had a base that we came out of in March, the very V-shaped, odd-looking one. Then you had a little flat base there. Then you had a tighter flat base here, which is very constructive. But we broke out and we pulled back in there, which happens a lot. So it just depends on what lens you're looking at. If you're looking at it from very, very short-term, it looks terrible. If you're looking at it from this standpoint, it doesn't look ideal, but it doesn't look abnormal. It just looks like we continue in this chop fest. Let's go to something like the IWM that looks horrible. And, obviously, this is not where you want to be. And you can see with that high being stuck underneath that 21-day, that gold line there, that has been in the doghouse for a long time. And if you use that checklist that I was talking about earlier, that signaled that we were in a downtrend, yeah, right around in that area over there. So it's in a downtrend until proven otherwise. So for the small caps to get out of the doghouse, you have to get above that 21-day. But I'm kind of burying the lead on here is the 200-day. The 200-day is the black line, and it's the most important line on any chart, whether you're looking at an index or an individual stock. And being underneath that is a really bad place to be. So you don't want to be in that position. So getting above that would be significant for this. But this isn't the area you want to be in. Let's go to the RSP for a second, because this is how I like to look at breadth. People like to look at breadth in all sorts of ways. Everyone has their favorite way of doing it. The way I like to do it is keep it simple and look at things like EQAL or QQQE or RSP. So RSP is kind of my favorite. Equal weight of the S&P 500. And this doesn't look as bad. It's rounding out the right side of a base here of a potential cup or who knows what it's going to end up forming. Do we like a downside reversal at the 50-day going into the weekend? No, but it certainly looks better than SPY or NASDAQ through the very short-term lens of a few weeks because our low is above our 21-day right now. So from a broader standpoint than just your normal index that most people look at, myself included, SPY, QS, NASDAQ, so on, that this one looks better. Let's look at the New York composite for a second because that's another broad-based one that's worth looking at. And it tends to trade pretty similarly to what we have with the RSP. And this is rounding out. And that kind of tells you the type of names that are working right now. The money is flowing into, let's pull up like a Coca-Cola. Going into something like that, that's just really not our type of stock. It doesn't look wrong, but when the market doesn't look good, these are the types of things that work. Or travelers, I think they had earnings today. And that one, I believe, ended up having a nice day. [00:13:16] Speaker 1: A lot of breakout, yeah. [00:13:17] Speaker 2: Yeah, exactly. Yeah, I agree with how you're looking at it there. So there's the slower and pokey names that it's kind of scary to go into because if we get an upside reversal on Monday and everything flows back into the NASDAQ type of names, these things tend to sell off during that. But the reality is it's the slow and pokey names that are working out. Let's just look at some of the damage that happened this week and some of the big ones. Let's look at Meta because Meta was looking really promising. It was something I was trading. And it's not totally broken at this point, but it did break your expectations because it was moving up there nicely. Now it's back below its 21 day. It doesn't look as bad as some of the other ones. Let's look at Microsoft, which has been a leading stock recently here. And this one looks pretty good compared to the rest, but short term looks like it wants to test the 21 day. Let's look at Google. And this is something that you should always do at home. And the Google looks just like it's in no man's land, just putting in time, but it's right there at its 200 day trying to get support. But always go through all the mega caps to get a feel for what that's doing to the averages. Now, one that really bothered me this week was Dell. And it's not as big as the other ones, but it is an important one, especially because the fundamentals on this one were stellar. Let's go to the weekly just for a second. And the numbers that you can see in the top left, as well as on the bottom, as far as the quarterly numbers, you can zoom out so they can see those a little bit better. You know, just really, really solid numbers if you focus your eyes down there on the quarterly block. So you have this stock that was looking like in the spirit of a high tide flag and then moved up and it was four weeks tight, was looking great last week, one of the best looking charts out there. Now you have this expectation breaker type of move, which is not a good thing. Let's go over to the back to the daily. And of course, we've got the space like SanDisk and Micron. Let's look at those for a second because this is what kind of got us here. But those put in a top back in the June, July timeframe, but Micron was looking good, still forming a cup with handle, had an upside reversal yesterday at the bottom of its handle. It's really, really low in that handle, to be frank, lower than you'd want, especially underneath the 50-day, underneath the 21-day, but still, I wouldn't have been surprised with a big move up today. Frankly, that would have been normal and natural, but an inside day when the rest of the group, let's pull a DRAM because that kind of gives you a sense of that whole group, that's just in trouble. And it could go a lot lower and be a real drag on the averages. Let's look at the SMH because this was another area that was looking good with stocks like AMD and NVIDIA and TSM. But now that doesn't really feel like a cup with handle. That feels like it's breaking down at this point. My algo is just picking it up as a cup with handle. But it doesn't really feel like it, does it, Ed? [00:16:47] Speaker 1: No, no, it's just not. I'm not sure if it still works, the math works. I guess maybe it does. I'm not sure after today. I mean, you know, because, but yeah, and that's pretty, you know, relentless, you know, and that's a little bit like how water that, you know, a little bit of water spills out of the tub. And it's not that much at any moment, but boy, it doesn't take that long to that floor is a real mess and it takes forever to clean up. How did this take, you know, it, that's, that's how it is. It wasn't like it was drip, drip, drip, drip, drip, I mean, not just really ugly stuff. And yeah, not, not good at all there. [00:17:23] Speaker 2: I love, I love your analogies. Let's go to a few others that really bothered me and then we'll go into the stocks that we were going to talk about. Let's go to Palantir. And so this is just to put color on what we're seeing with that expectation breaker that we had on SPY and the damage that we're having on NASDAQ. This is one of your other leading stocks. Man, was Palantir that bad that it doesn't want to pick it up? Let's, let's try another stock. Let's go to, Jada, some other ones down. Let's go to CrowdStrike. We can't. [00:17:56] Speaker 1: Let's see if I can get to something here. Let's. I'm. Yeah, just having, just having some issues. [00:18:07] Speaker 2: Nothing is working. Okay. So then why don't we do this? Why don't I, we'll just switch on the fly. I will. If that's, if market surge is given a problem, why don't you send a note to them and I will do my non-market surge charts right now, get that over with, and then we'll circle back and talk about the Apple and things that we were going to do. If that works out. Okay. So let me, let me, let me share this. I think the market was so bad. Market surge didn't want to work. [00:18:38] Speaker 1: Mine did work now. Sorry, if you care about that. [00:18:41] Speaker 2: Yeah. Then let's, yeah, let's do it. [00:18:43] Speaker ?: Sorry. [00:18:43] Speaker 2: No, no, no worries, man. Let's go back to that. And I think we were going to. Strike up. Yeah. Let's do that one. So this group was one of the ones that was kind of a stealth leader. They were forming, you know, ascending bases over the last, you know, really from June through September while everything else was choppy. These were choppy, but in a more constructive manner than so many other growth stocks. And it was an area that was leading and pull up CIBR for a second, because the ETF that the area kind of tells you a lot. It was, you know, it was very strong. But then today we had this outside day downside reversal closing below the 50 day. Not a good luck. We can go back to the crowd strike and then we can go over the pan W. So a bad look there for a leading group. This looks like it wants to form a base. You know, you've got to, if you study enough charts, you kind of get a sense, like, when does something look like it's just going to bounce off the 50 day? And when does it look like it's going to form the left side of a base? To me, with the damage that we've had, the distribution that we've had selling after selling, because two days down is normal. Sometimes three days down is normal, but not when you go like this and day after day with no upside in there. That means someone is trying to reduce their position in a material way. And that's how bases are formed. It doesn't mean these stocks never come back and run the doghouse forever. It's just through the lens that we look at things, this is in trouble. Let's look at the pan W. Same basic thing there. And, well, that's actually worse, right? And Hat Man sent me something about that because I was asking what was happening with this group. And this one looks a lot worse than the other ones because there's a base breakout failure and a clear, decisive break below the 50 day. And you can see those RS lines are slicing through their moving averages. And then let's look at something like a service now, which was looking really good yesterday. So many stocks. It looked great yesterday and it was in this really constructive base-on-base formation and you would have expected this one to just blast forward. In fact, it was a stock that I talked about this morning on IBD Live. You know, pre-market, it was looking great and I was expecting this to be, you know, having a big move, being up as much as it was down, but you have this kind of whack-a-mole type of market where anything that's up, they're just hitting and some of them are in trouble. Other ones are just like, "Oh, well, we're up on this, so let's just sell it." And then that selling just kind of piles on. Did we talk about Palantir or we were going to? [00:21:27] Speaker 1: We were going to. Let's go right there. [00:21:29] Speaker 2: Okay. So this is another one that really bothers me because that got really nice support at the 21-day yesterday. Even though it was blue on the day, it was an upside reversal right there at a Livermore round number of 200. Gave you a clear expectation that, you know, I went home last night going, "Man, I should have bought Palantir. Why didn't I?" And I was planning to buy it today. And then, wow, look at that outside reversal, you know, outside day, downside reversal. The only good thing about it is that it didn't go through its 50-day, but it was down 7% on the day. And this is, this one and the Dell bothered me the most because their fundamentals are so strong. And when you have selling like that. Now we've got earnings around the corner. You're the earnings man. Where would you say the bulk of the earnings are? Is that two weeks from now or is that next week? [00:22:19] Speaker 1: Two weeks. I think the big earnings report next week is meta just because it has such an influence what they have to say, what their capital spending is because they're the first hyperscaler. And we have a lot of other earnings, but I think that's the one that everything will really key off of. But yeah, then probably the following week or two, we'll get the apples, the, you know, Amazon, Google, Microsoft. Yeah. So yeah, but a lot going on. We do also have Western Digital, which looks terrible, but it's going to be a memory play. You know, so there's that too. [00:22:46] Speaker 2: Well, it'd be good to get some info in that space because it's so, let's go back to the, let's go to the Sandisk on a weekly chart. And then we can go to our three stocks we're going to talk about. So the fundamentals are stellar on this one, but the fundamentals when a stock tops are almost always great. So you queue off of the, what the technicals are doing. This one is in trouble. Best case scenario, it forms a base here. And it could be a really wide base and go lower and then sets back up. But worst case scenario, this could go down a long way. And then if this goes down, most likely micron goes down, the sky goes down and anything in the space goes down. Cause they, they tend to travel together. Just some are a little bit more magnified than, than others. So there's some big questions there. But if this were to come down, you know, seeing 200 on the stock would not be out of the question. That would be normal and natural. In fact, lower would be normal and natural for a model book stock that is topped. Cause when, when Chuck and I did a study way back when for model book stocks, this is a clear model book. One of the best stocks of the last year. Um, they, they fall on average 70, 72%. And then when I did a broad based study of all the stocks in the database historically back, that was back in 2013. That I did that study going back to 1963. I was able to confirm that 72% was right about what ended up happening after stocks that had major moves. So not just a small subset like Chuck and I looked at, but everything. So don't get married to a stock, no matter how much you like it or how much you're up on it, have some lines in the sand. This is where I would use my quick, quick sand, grateful dead rules for selling. And if you use those that already gave you sell signals a while back, if you don't know what those are, I've got a YouTube channel. It's Webby 5150 and just search on there for quick, quick sand, grateful dead for anyone who is. Um, and there's two episodes on, on that, as well as I've got a bunch of bottle model book, uh, episodes that walk through how you use it on, on ones that have a big moves. I would study the Qualcomm from 1999. That's one of the episodes in there, but just that allows you to be objective. If you just look at that RS line, which is that blue line, if you could just point to it and those moving averages, when it crosses below them and just think of that, that last line that it crosses through. That's your sign that, you know, you've got to get out of Dodge because that move is in trouble at this point. And if you're in question, um, that's what you would want to do. Now, with that said, never use an indicator until you understand it and have tested it. So just, if you don't already know it, start to get to, uh, know it now because it could really help you if you've got some good, uh, gains that you're trying to, to book. Let's go ahead and, uh, switch gears and go over to the three stocks that we were going to tackle today in any order you want. [00:25:55] Speaker 1: I think Apple was one of those, so. Okay. [00:25:58] Speaker 2: So this one, what I like about it is it's slow and steady, and they're not aggressive in the AI space. They're playing AI, but they're not doing it with the capex that so many other players are doing right now. So if AI runs into trouble temporarily, whether that's two weeks, two months, two years, who knows? That, uh, this one would most likely you would think hold up better. And then they've got the new products coming out and everything. And so I think a lot of people are going to like the, the different format for the, um, for the iPhone, even though it's super expensive as far as I'm concerned. But let's look at the daily. Are you going to get one of those, Ed? [00:26:38] Speaker 1: I just get Apple phone or Android phones that are a year out of date. You know, I pay like 150 for mine. I just, I want to make phone calls and texts and check, you know, check Twitter kind of thing. I don't need, I don't know why a $2,000 device is needed for that. Me too. [00:26:56] Speaker 2: Like, but I, you know, what I do is I'll get the latest iPhone only when my phone, uh, I get, you know, stops working. You know, it's really one of those things where there hasn't been any innovation. This is the first real innovation. Well, it's really, they're copying what's already been out there for a while, but look, the chart looks good, especially on relative to all the other mega caps. This looks the best holding up their near highs. And again, look at that RS line on the daily versus it's moving averages. It's above all of those. So this is, if you're not, if you're just dying to have some technology, uh, maybe you got kicked out of some stuff this week and you're looking for, for a stock to, to buy. Uh, you don't have to buy it here, but it is viable and it's starting to build a little shelf. It's a little early in on this, but, uh, those are some, um, at least something worth looking at. I'm not a fan of the gap down in the base, but it did make up for it, um, a little bit, you know, as it went up the right side. [00:27:58] Speaker 1: And this is a high handle or a week or a four weeks tight, you know, however, if you look on a weekly. So there's, as you say, there's a shelf. There's a lot of, this is clearly resistance. It's been hitting that area right for left. So if I can blow through that, I think that'd be interesting. And it also falls in, as I say, it's not AI and it's consumery and consumer stocks are doing well right now. I mean, a lot of where the retailers are your Cokes, but it works for Apple too. [00:28:22] Speaker ?: Yeah. [00:28:22] Speaker 2: Let's look at XRT for a second. And you'd mentioned that pre-show in this was super powerful yesterday. I mean, really was, was a massive standout and it looks like it's building the right side of a base. And, uh, so I didn't like the action today, but you do want to take that with a grain of salt. Cause everything was getting hit today, unless it was energy. Like there was some one offs that were up, but for the most part, if it was, if it was oil related and energy related, those were up, but everything else was down. And, um, but yeah, money's flowing into that area as well as, you know, into the home building type of things with interest rates looking like they're, they're, uh, stabilized. Uh, stabilizing or moving lower, but, uh, you know, we'll see how that plays out. We're just certainly the home builders are not ones that we're going to want to be buying here. Now, XLP, I hate when this goes up because that's a, that's a safety play. So unless you are thinking we're going into a bearer market or something like that, you want to stay away from these other than just some quick swing trades. Because the XLP, if, if money starts flowing back into the queues or things like that, this will likely sell, sell right off. That's why I don't feel very safe. [00:29:37] Speaker 1: I mean, yeah, if it's a bear market, yeah, it can be safe, but boy, if you have any kind of rotation, even just for a day or two, you could, you could just saw what happened yesterday. When the market came off a lows, XLP really came off. You can imagine if we have a snapback rally, not even a great lasting rally, but you could see, you know, the NASDAQ rises back to the 50 day line or even above. And, you know, you could see these names come down. I, some of the growthier names in the retail consumer space, you know, a shark ninja or, you know, urban outfit or something that has decent growth. That's a little different, but yeah, your, your single digit get your growers. Yeah. That's just me. That's me. [00:30:17] Speaker ?: I just. [00:30:17] Speaker 2: No, I, I, I totally agree with you. And one thing that I don't think people kind of always realize or is, or the market mechanics behind things. So why does this happen? Well, in my opinion, and there's really no way to prove it is mutual funds. Mutual funds have to stay 95 plus percent invested at all times. So when the market's getting hit, they're selling off their microns and their Dells and their SanDiscs. And we're, they can't raise capital. They can't raise a cash the way all of us can do. So what do they do? Well, they, they go into the Johnson's and Johnson's and the Coke's and the Pepsi's and the Costco's and, and things like that and hide. Now they tend to have lower turnover, so they don't move as quickly as some others. But still, that's what I think is it, you know, happening and why that ends up working out. And then once the coast is clear, they sell those off. It's just, they use that as a source of funds and move into the, the sexier names. Why don't we move over to Cheesecake? Because I am getting hungry. So this is one that I think you can interpret multiple ways. You can interpret this as a double bottom. You can interpret it as a cup with handle that, that broke out four or five days ago. Yeah, right there. Or you can look at it as a cup without handle. There's not a right or a wrong way of doing it. And I, you know, if I was drawing it myself, I would draw it as a cup with handle that already broke out. So it had a mile down day today. So what are you looking for with this? If you're not already in it, if it can handle out here and then, you know, drift down a little bit and then kind of have a little bit of a higher handle that can give you another entry point. If it takes out today's high, that's an entry point. Or it could just do a shelf. But if you don't already own it right now, it's not something that you have to be buying. But it's at least nice to see some, you know, other areas that are still working, even though it was down today. So I would classify this as working by just looking at, you've got the blue dot on there. That's the RS line at new highs while it's in a base or on a breakout day, as well as that RS line is above its moving averages. So that's a good thing. You do have earnings, you know, 11 days. But that's the case for most things. [00:32:46] Speaker 1: Yeah. [00:32:47] Speaker 2: And then we can go over to Lily, which I do have a position in. And with this one, I would say it was viable a couple of days ago as it was moving over that area of resistance. That's not a textbook buy. That's not something that Bill O'Neill, if he were with us, the founder of IBD, would say is okay. But what it's doing is forming a cup. This could end up forming a cup with handle that if you bought it, you know, a few days ago, like myself, you might end up getting shaken out of. But I think this is one of the best looking charts right now out there. Now, a week ago, I would have said that about Dell and we saw what ended up happening with that. So that kind of tells you the type of environment that you're in. Something looks really good one week or one day and then the next day it looks horrible and broken. But what it has going against it is that it's looked really good several times in the past last year as well as earlier this year. So, you know, it's a real double bottom flat base type of thing that it tried to break out of and failed. So, you do, you know, need to be careful with that. But it feels like money is moving into the slower type of medicals right now as it's moving out of the technology space. So, kind of anything medical related is getting a bid. And I think this is your strongest one there. What's your take on it? Yeah, I agree. [00:34:17] Speaker 1: And I like this better because this is defensive growth. I mean, if the market returns to AI, it's not like Lilly's going to fall apart. I mean, it might lag. I mean, I'm not going to predict anything. Who knows where anything will go. But, yeah, I think this one is a little strong. I think you nailed the buyer time. That was the time to get it. It was over a clear area. Yeah. So, well, yeah, this is still growing pretty strongly overall. I know the next quarter supposedly is going to be weak. I'm not sure what's going on there. But the trend still is pretty strong growth for this thing. [00:34:48] Speaker 2: Perfect. Well, why don't we go ahead and switch over to my charts. If you can stop sharing, I'll share mine and we'll go through that. We'll give you a little bit of a break. Let's see. [00:35:01] Speaker ?: Okay. [00:35:02] Speaker 2: So this is the part of the show, if you're new, that I walked through a bunch of different charts. And each one is going to be either SPY or the NASDAQ. And we're going to look at each one in isolation and try to just let it tell a picture to us. And if you're watching at home, you can just have a little notepad and say, okay, this one is good. This one is bad. And that's how I like to do it and just kind of have a mosaic. I have all these little pieces together. And then I kind of step back and it tells me what type of picture, what expectations are for the next week. So this is my, the Bob Weir, take a step back, looking at a longer period. This is a SPY weekly candle. And you want to know what to expect the following week. What would be normal and natural? Well, with a terrible candle like this, where you've got a wide body on there and then you close lower than where you open. Obviously, since it's a peak candle and you close significantly under last weeks, your expectation is down or sideways. Because normally with a candle like this, you'd think sideways or you would think down. But in the context of the last month or so in this little kind of basing area, it's just back in there. And so from that context, you're looking at possibly sideways, even an inside week wouldn't be abnormal. Now let's look at the NASDAQ, see what type of picture that tells us. Well, much worse, right? A dramatically wider spread, closing at the lows, just a tiny little bottom wick. And last week's candle was kind of stalling up there, which gave you an expectation of sideways or down, just not down this much. So this one is, looks, you know, if you just looked at this in isolation, lower is what you would expect. Now let's go over to our regression lines and see what that tells us. So this, these are regression lines and I'm starting these on, on this move here on August 4th and then stopping them this, this Tuesday. And that was 50 days. And that's how I like to look at this. So if you've never seen this before, it's just a line of best fit or a regression line where your white line is your, is your, is, can you mute yourself? I'm hearing the typing. Yeah, I'm sorry. No worries. So you're just, what you're looking at is that white line. That's where it wants to go. Once you have a trend established. And this was just a sideways trend. And it really looked like over here that it was breaking out. And then we thought we were going to have a, a, a move higher, but it fell back in and that was normal because it came back to its white line. But now it's still normal because it's in this basing type of area, but you really want it to move back up to that white line. So through this lens, it's negative, negative to neutral. Now, not the same thing with the NASDAQ. So same dates here, August 4th over to this Tuesday, which was our end date on Sammy's birthday on October 13th. So now we are, our high is underneath this green line. That is one standard deviation away from our white line. What does that mean? If you, and you know, kind of zoom out so you can see the last time we broke through it. Over here on June 23rd, we were underneath that green line, the one standard deviation from there. I like to give it a few days to see if it can move back into the space. It didn't do it. And by this time over here, then you have to kind of throw out that trend and look for a new trend. So what does that mean with this? If we're going to get back into this uptrend, which was just at a slight slope, but a better slope than what we had with SPY, it would have to happen really Monday or Tuesday. And then they get back into this green area, which would be essentially yesterday's high, today's high. If it can get up there, that's actually where you push it. And I use it as a mean reversion trade. And so if it were to get back up into this area, certainly this dash line, which is a 0.75 standard deviations away from this. So let's just think of it as the high above the high from yesterday. That's where I gun it thinking that you're going to get back up to your white line in short order. And then typically what happens is they overshoot and lots of times they go back up to this red line. And you can see that happened over here. It went through it. And at this point you wanted to gun it and went right up to that red line. So there's just another tool to have in your toolbox. Now let's look at SPY. And with this one, this is our 50% retracement. And this is an art at picking what your highs and lows are. And for this one, I'm using the July 29th low and your high from, what is that, October 6th. And I just look at the midpoint, which is 755 and change. Is it staying in the upper half or the lower half? If it's in the upper half, as it was doing here, that's a positive thing. If it starts living in the lower half or what I call the southern hemisphere, that's a negative sign. So with this, it's still positive. So that's good. Let's look at the NASDAQ. NASDAQ, it just came down to that 50% area, the 26,074 area, and bounced off of it a little bit. But with this, most people aren't looking at it through this lens. So that level itself isn't important. It's just the area. So it's still in the upper half technically, but certainly in a downtrend. So we want it to stay up here to consider it positive. Our next one is, these are the lines, the same lines I had on last week. And I just wanted to show, you know, did they break them or not? So the next line that we have here, the 75879, that's a level we don't want to go through. And that's the low that we had over here at the beginning of October. The next key area would be the low that we had on September 16th at 749.60. You certainly don't want to go underneath there. And you could have put more lines on here, but I tried to keep it where it's not too busy. Then we're going to look at the NASDAQ composite. So this broke through decisively through two levels that we had on there last week, the 27,066 and the 26,707 area, and didn't stop at all through those. So it just sliced through them like butter, not something you want to end up seeing there. Our next line in the sand would be 25,802, which is the low here. And, you know, a gap down to that on Monday would be what you would expect. That's with a close like this. Our next line or lines here, these are just a bunch of Fibonacci exponential moving averages. That's what all the little colors are. So if you want to Google Fibonacci sequence and, you know, so we've got the white line there. That's your current trading bar. And I just look at it, are they stacked right? And so the levels I use are the three day, the five day, the eight day, the 13 day, the 21 day, the 34, the 55, the 89, and so on. Those are your Fibonacci numbers. And that's just a easy way to kind of tell is it trending nicely or not over here during this August timeframe where you were probably making a lot of money. That's what you want to see where there's stretching out kind of like a fan where your three day is above your five day and your five days above your eight day and your eight days above your 13 day. That's what you want to see. That's what you want to see. That's what you want to see where they're starting to roll over. So it's just another lens to look through and look at it with a negative bend. And then the NASDAQ, as you would expect, looks worse with this, our current going through all of these. So you're expecting lower move there. Now, the last one we have on here is just simplified. This is just the 21 day because that's the one that's the most important to me. And this is just your closing price on here in a line format. And this has a bad look, which you would expect it to go lower looking like that going into a Friday. And the same thing on the NASDAQ. Now, let me stop those and I'm going to share a couple more charts. And if you have anything that you want to say, just certainly jump in because everyone wants to hear you more than me. Because you've got the analogies and I don't. So this is the Webby RSI. This is a way that I like to look at trends. And it's just a very simple thing. It looks complicated, but it's not. It's just this histogram down at the bottom. It's just measuring your low versus your 21 day. Or if you're underneath it, your high versus your 21 day. It expresses it down here with a histogram that is in terms of ATR, average true range. So just how much is it above or how much is it below relative to itself. Right now, you don't have a line on there because our low is not above it and our high is not underneath it. So you have no Webby RSI right now, which is not a good place to be. And so your expectation is lower as you're moving from having a positive RSI to not having one. So that's just reality. Now let's look at the NASDAQ. This looks much worse because we've got our high stuck underneath it for two days. And that's why when your high gets underneath it, then you start measuring that here with these burnt orange colors. So if you look at times in the past, in this April timeframe, you had a wall of blue. That was meaning that your low was staying above your 21 day and in a material way. That's what you want to see, a lot of power. We were starting to get a little baby wall over here of blue, and then it fell out of bed. Over here, this burnt orange, you had a little baby wall there, and that meant your high was getting stuck underneath your 21 day. It's a very powerful way of looking at things and just kind of scrolling out. You can see in the past over here, and this is during the tariff situation where your high was underneath that 21 day in a material way. And so you had a wall of orange, and then things switched, and then you had a wall of blue. So you want to trade with a wall of blue. Our last chart here, this is my Bob Marley indicator, and it's very simple. We're just measuring are the pullbacks normal and natural or not, and they're expressed again in average true range, which is over here on the right side. So it's just telling you, is this pullback normal relative to itself over recent times? So this is, we're about three ATRs off of our high. And that's pretty much normal for what we've been dealing with. In fact, over here on September 16th, we got down to about four and a half ATRs. So you could come down to that point and still be normal and natural within what we've had recently. We don't want it to get worse, but at least that's how you use this indicator because it stopped over here, stopped over here, stopped over there. So that would be your expectation. So again, lower. Now, just one more thing on the Bob Marley indicator. [00:47:02] Speaker 1: Yeah. You could argue the green areas where, okay, they shot the sheriff, but when you go deep into the yellow, that means when they've also shot the deputy. I love it. So, you know, just got to watch out. I don't get nasty. [00:47:16] Speaker 2: That is, oh my God. Do not get me started. Okay. I got to ask you, Bob Marley version or Clapton version? What's your favorite? [00:47:25] Speaker 1: You know, I prefer, I think Clapton. I think Clapton. I, I know I'm not really a Bob Marley fan. I'll be honest with you. Oh, I always said you're right about everything, but okay. [00:47:36] Speaker 2: I'm not. [00:47:37] Speaker 1: I'm not. [00:47:38] Speaker 2: I will give you, I will give you this. You're, you, the Clapton version is very, very nice and mellow, but I, you know, when you're talking about. [00:47:47] Speaker 1: I don't mind that. I don't mind the Marley version, but yeah, I think I, I cater more to start Clapton. So I got no, no objections to anybody who prefers that one. [00:47:54] Speaker 2: Okay, cool. Um, and then let's see. So we did that one. Let's look at the NASDAQ problematic here. So yes, we did get worse and, and it got down to, uh, over six ATRs in mid July, but this, you know, it stopped here. It stopped here at like 4.2, stopped here at five and you're kind of there. So you don't really want it to get much worse. You certainly can expect it to come down to here and still be normal for this. It wouldn't be fun, but let's just kind of show how bad things can get when they start going through levels. So here was the RSP and this is kind of a good way of learning this indicator. So with this, during this timeframe, uh, here late last year and early this year, it was stopping right around, you know, two, let's call it two and a half ATRs off of its high as it was pulling back normal and natural. And then once it broke that right here, that's then, you know, the bottom just fell out and it came down to there. Um, then it, it recovered and it was kind of, uh, you know, you're kind of a two, two and a half giver, give or take area, which was normal and natural. And then at this point at the beginning of September, it started falling out of bed and, uh, not, not a good sign there. So that's what we had for you. So just kind of wrapping up the mosaic of, of things. There were a couple of things that were positive or neutral to positive. So the 50% retracement on spy, even to a certain extent on NASDAQ, those are okay. The take a, uh, a step back, looking at the, uh, spy weekly candle was, you know, neutral to negative, but everything else was really negative. It is just reality. I mean, I don't want to be negative, but that's just what the things are, are telling us. The good thing. And the bad thing is we've got earning season right around the corner. And Ed is kind of the master of the earning stuff. Cause that's one of the things that he does at work. One of the many hats that he wears and he's on top of the earnings. And that can really change things in a material way, good or bad. So we're in this risk event timeframe, um, that could give us a lot of opportunities, but the way things are, are set up, it's not looking good. That's just the reality. What areas are looking good, slower poke your names. Things like REITs, um, are, are looking good. The staples are looking good. But again, if the, and even some insurance stocks are looking good, um, certainly retail. Uh, I, if I were going to pick any of the, the spaces, I would be looking for medical and retail for names because they can work in both. And they have the potential to work in both environments. Even if the market turns and goes up, like you said earlier, the things like the shark ninjas of the world, the, and the, the ones that have the earnings there or have a story or like a cheesecake or, or similar in urban outfitters or things like that could work even if the market firms up. But if you're, if you're hiding, you know, running to a Coca-Cola or something like that, that, that'll likely only work out if the market continues lower. So, um, you know, you just have to figure out, would you rather just have more cash in your account or not the expectation breaker? Could we, could you pull up the, the market charts again? Sure. And again, like an expectation breaker, and I do have an episode, if I didn't mention it, explaining in more detail what an expectation breaker is on my YouTube channel, Webby 5150. Uh, those are a big deal, but it is an art and there's some that work, uh, that look worse than others. This is not a terrible expectation breaker, but it's a clear expectation breaker. Sometimes it's like, Oh, it kind of broke your expectation. But again, yesterday gave us a clear expectation upside reversal at the 50 day to move higher. Also that had happened a few weeks back upside reversal at the 50 day. And we moved higher and we went up to new highs. Um, one thing I'll end on, let's go to the NASDAQ and let's do, I just jotted down this date. I know I do this one all the time, but let's go to October 18th of 99. Um, and just having this current chart in our mind. So this was 1999 before the last little move up where you had gone up into new highs. It was looking good. You're like, Oh, we're finally going to work. It's been a choppy 99. And you're really bullish. Like I was really bullish. Call it the way it is. Um, and I would be really bullish again if you put me back, you know, two weeks ago or a week ago. But, uh, then the bottom fell out and you undercut a marked low, um, in there. Your high was underneath your 50 day for a few days, closing down, looked terrible. And bill was very bearish at that point. Now go out to October 29th. And things change. So you want to keep an open mind. But something that he told me all the time was Mike be flexible. Bend like a tree in the wind. And he showed us all. I mean, Ed saw it too. All of us saw it, how flexible he would be. He would be super bullish. Then things would change. He would, you know, the, the, the sky is falling. The sky is crying, so to speak. And, you know, it's 1987 all over again. And then things would firm up and he was super bullish again. That's just the way that kept them alive in the business for decades. And that's the model that we try to follow. Let's go out to the next date, March 10th of 2000. And why I say you have to stay flexible. Because this market is chopped me up to pieces. I don't know if it's chopped other people up. But it's just, it has been the kryptonite for my style of trading. And if you get to the point where like, okay, I'm not going to trust my charts this time. I'm just going to go put myself in time out for three months or something like that. Which will work if we turn into a 73, 74 or 2000 to 2002 or an 07 to 09. But those don't happen all that, that often. You want to stay mentally flexible. Because if, when that turned, could you go just show where the October 29th was that we were just looking at? Right there. Yeah. Yeah. The gap up. Sorry there. [00:54:40] Speaker ?: Yeah. [00:54:41] Speaker 2: Right there. So that was the point of which people would be like, oh, I've seen this movie before. I'm not going to play this. I know what happens. I'm going to get my head handed to me. I've, you know, death by a thousand paper cuts and all of that type of thing. I'm going to just wait for a pullback. Well, if you study history, when that happens, everyone is frustrated too. And those pullbacks don't happen. The shorts get squeezed. So just, I'm not saying this is how it's going to play out, but it's a potential. Not, we hope that it doesn't play out to this extreme because that was the beginning of the end. So I'm not saying we're at the end of a bubble. I think we're at the beginning of, you know, the first couple of innings of a long AI bubble, which would be, let's go to the monthly chart. [00:55:25] Speaker 1: And I would just add, just to point out. Yeah. You know, because I'll be looking at the econ news or the political news or whatever news and I'll get bearish from that mindset. But when the market does that, like on October 29th, you at least want to get your foot in the door. Okay. Because then once you get started, then it's like, oh, okay. Because then when the good news rolls in, you can start adding, you know, just getting in, even as with an ETF or something like whatever. Because, and yes, if it doesn't work, then you can get out and fine. Okay. But you just don't, let's shut it out and listen to the market, especially then at those times, because yes, the news is often bad around there, or there's reasons to be bearish, you know, arguments. But the market is telling you something, get in, get in. So I'm going to go to a monthly, is it the same time period? [00:56:08] Speaker 2: Yeah, same time period. And I love your comment there. And it goes along with how I like to trade. So when the market turns, if the market turns, assuming the market turns for the positive, getting your foothold in there is so critical. And if you can't find a perfect stock to buy or you don't want individual risk, go with a broad-based ETF, whether it's SPY or Qs or even a sector ETF to get a foothold. Then if that starts working for you, you can either hold that and start buying individual stocks, or you could sell that off and use it as a source of funds as individual stocks start giving you some buy points. And why I wanted to mention this is we're in this AI bubble, you know, and no one knows when that is going to end. It could have ended already. It could end two years from now. It could end two decades from now or anything in between. We don't know. So trying to guess that is beyond silly. I'll let someone else try to figure that out. Just use the charts. But on a monthly chart, this looks like it's a beautiful thing, this beautiful move up. But really what I think everyone should do is every day or every week, just take a different year in there. You can start off in 1990 or you can even go back to 1982. That wasn't an internet craze, but that was when that major bull market started. And go through that and just pick three months or six months or a year at a time and go day by day through that. Look at the things that are important to you. I like to use the 21-day, the 50-day, and the 200-day. You might use a 5-day or a 10-day or an 8-day or a 13-day or whatever. You look at those indicators that are important to you so you can start getting in your mind like, Oh, yeah, the backdrop there was great and it went a lot higher. But the ins and outs, how do you put on your gas pedal and your brake pedal using the market averages? And the other thing is sometimes you can just look at individual stocks and just base it just off of that. That's what I did on the first part of 1999. The first three quarters of it weren't using the or even the last part because I didn't really have that good of a market analysis at the time at all. I was just looking at individual stocks and that can work out for you. So you just look at each one and just go, OK, in isolation, does this look like a buy point? And then just trade it regardless of what the indexes are doing. And you could do really well through that strategy and that can help you with all these rotations because the stocks will set up, the groups will set up, the medicals will set up, or if the software comes back or the chips come back or the DRAM come back, you'll see it in those individual charts regardless of what the S&P or the NASDAQ or the IWM or anything else is doing. Let's end on one last thing. Let's go back to the current timeframe and let's look at the NASDAQ on a daily. And one point of why I always say keep things simple. This is a concept that I learned from Bill that just look at if you're interested in the NASDAQ, look at the NASDAQ. If you're interested in SPY, look at SPY or IWM, whatever it is. Don't look at other things. And I went through all of those charts, the mosaic charts, and they were all, if you noticed, they weren't looking at Putacall and VIX and Bull Bear and all these other things. It was just the price of SPY and NASDAQ just dissected different ways. So I would suggest doing that versus what I see a lot of people and very intelligent people looking at the bond market. Let's pull up the TBT or the TLT or whatever your favorite way to look at it is. So with this, the concept is higher rates are bad for the NASDAQ and lower rates good. Well, if you're just looking at that in isolation, well, how did that help you this week? Oh, then you can say, well, it's different this time because it's because concerns of the AI financing, all this stuff. Give me a freaking break. Just study the instrument that you're thinking of because I didn't hear any of those people who were talking about how the bond, what the bond market was doing and why you shouldn't have been in NASDAQ as it was going up, talking about how you should switch over to it. And I'm not saying the bond market isn't super important. I'm not saying that the yields aren't the most important thing for the economy. Fixed income, the yield curve, the whole thing for the economy, the most important thing for currencies and all of that. But that is factored into what SPY is doing, what IWM is doing and what the NASDAQ is doing. That's not my thing. That's something I got from Bill. I just have taken it further than where he has. I will look at those for context, but I'm not going to be negative or positive on the market because yields are going up or yields are going down. And the other thing, look at historical yields. We're just, you know, everyone is just focused on this post great financial crisis where the yields were in a completely different thing than anything that we've seen historically for obvious reasons. And now we're just more back into a norm. You're econ ed. So what is your take on all of that? I'm sincerely interested. [01:01:32] Speaker 1: I mean, look, we had this long period from the mid 90s to, you know, just about 2019, 2020, where inflation was pretty tame. And that really helped. And it was steady things. And it was great. It did help. You know, you could load up consumers and businesses could load up on more debt and it was easy to finance. You know, when mortgages are 3%, 4%, it's a lot easier than 7%. You know, so it is coming normal. So it is coming normal. So it is normal. But that does suggest more of a drag on thing. It just makes it a little harder to invest. It's a little harder to spend. Put something on the, you know, kind of thing because, you know, you're going to have to pay for it in a way that you didn't have to before. So, but I mean, it is what it is. And I do agree with you. I do look at the yields. I do all those things. But it's ultimately the market. I was thinking about a different subject. Look, there was a lot of negative news on AI and it was negative because the market didn't like it. You know, whatever Broadcom said or Anthropics revenue or CoreWeave debt. But honestly, you know, let's see. Well, if Meta and maybe SpaceX, they're not as big in terms of capital spending, but if their capital spending is enormous, maybe all those negatives turn around. Oh, well, don't worry. We don't have to worry about the finance. There's demand. There's going to keep that engine is going to keep going. And so you could whip around. But the negative concerns are still there. But if the market ramps up, that's your signal. Ultimately, you know, you know, it's not that there's still reasons, legitimate reasons to say be worried about this or that. But if the market ramps up, that's your signal. And if the market sells off, it's like, well, that's your signal, too, on those things. So, yeah, I agree with you. The market really is the signal. I mean, it's interesting to look at that stuff, but it's. [01:03:15] Speaker 2: Can I ask you another another question, Ed? So what is your take on this? So a different way of looking at it is everyone's concerned about a bubble in AI. So from a positive thing, all this concern about the spending and like pull up core weave since you mentioned that. And it looks terrible. It looks absolutely terrible. Look at it on a weekly of how how bad that looks. And so if this wasn't happening where there were concerns about things and they were going up even amid those concerns, you'd be thinking you're much closer to an end or the bubble popping because they should go down when you have those concerns. And I look at it as actually a good thing for the long term that we're not getting carried away with the moves because I don't know about you, but it's really bothered me all this CapEx like the numbers almost just seem like just it's like what the government was doing with the COVID timeframe of just throwing everything because, you know, they have these concerns. I'm not saying good or bad. I don't want to get into that, but they were putting such huge numbers to fix the problem. And then then we dealt with inflation afterwards. So they were putting these huge numbers in the A.I. space. What's your take on that? It's like getting some air out of that balloon. [01:04:42] Speaker 1: Yeah, it is some of that. And of course, the back and forth. Are you going to see that payoff? That's the thing. It's like because basically, Meta basically didn't have any cash, new cash in the last quarter. Whereas Amazon and Google were a little negative. I mean, they had these massive profits and they spent it all. SpaceX and Tesla, you know, which are in there, they burned cash and they're going to burn cash again. I mean, there's a lot of burning cash that all these profits in many of the hyperscalers and it's all being spent. If it all pays off down the road, OK, fine. But if they're spending several hundred billion dollars, boy, you'd like to see a payoff on that. I mean, there's a heck of a return on investment that they are doing. And, you know, that's just I mean, the amount of money is staggering. But, you know, it's I mean, it's staggering. I think, you know, just each one of them, I think, is spending more. Each one of those four hyperscalers are spending more than a hundred billion. Then you throw in SpaceX and Tesla and Oracle and Alibaba and everything else. It's just jaw dropping. And that's, you know, so, yeah. [01:05:41] Speaker 2: And we don't even know if they are going to be the winners of it, right? Because they're building it out. And I think that there is a good argument to be made for that we have no idea. Just like we had no idea back then that it was going to be the Ebays and the Amazons of the world that we're really going to be benefiting more than the Cisco's. You know, the of the world or the Dell's of the world in those types of players. Probably Dell was a bad example, but certainly the Cisco of that timeframe. Then it went into all these other places that were benefiting from from the Internet. And so we don't know who is really going to benefit the most from AI. Is it going to be in the medical space? Yeah, probably. Is it going to be in the retail space? Yeah, probably. Is it going to be everywhere? Yeah, probably. So it could be these guys and girls are spending all of this money laying the foundation work. And then we don't know what the it could be a company that hasn't even come out yet. You know, like a like a Facebook, like a Meta that wasn't even around when that was being, you know, built out. So it's going to be very interesting. And again, why we just say, you know, just use the charts and let the charts be your guide. If you're looking at something like a core weave, just remember there are lots of stocks in the 99 timeframe, 97 and 99 that look like this and went to zero. And so you don't don't fall in love with something, no matter how compelling the story is, because they can have an exit strategy. Any exit strategy is better than no exit strategy, even if it's a terrible one. Just have some line in the sand where you're like, OK, I'm crying, uncle, and I'll have a way to get back into them. [01:07:35] Speaker 1: Yeah, I completely agree. You're right. And yeah, you don't know it. The A.I. trade might triple by the end of the year and core weave goes to zero. I mean, it wouldn't. But you know what I mean? You know, like there's names. The thesis, the broad thesis can be correct, but it doesn't mean. But you still have to look at the individual stocks, the charts, and that will tell you. It's like, well, wait a second. Which ones do you really want to be in? Yeah. So this is a lot of fun. Yeah. [01:07:57] Speaker 2: Final thing I'll say, and you can get rid of the chart if you want. The final thing I'll say is, and you should do this every weekend. It'll be easier this weekend because there'll be fewer stocks that make it through your screen. Look for stocks, run a market surge, stocks that are above 10 bucks. The stocks that are above $25 million volume or $75 million volume, depending on how many stocks you want to make it through your list. And that's dollar volume, not share volume. So either $25 million or $75 million. Those are my go-to. And that are above their 50-day simple and their 200-day simple. And that'll give you your universe. That should be what you're considering. If it doesn't make it in there, you really shouldn't even consider it. And just sort those by sector, your broad sector first, and then you can sort it by what was down the most this week. Or you can sort it by composite rating second, which is what I like to do, to get a feel for where that money is flowing into and out of. And that's something I do several times every day. And so at least do it once a week on a weekend. And it'll give you kind of a sense of where the carnage is and where the money has been flowing. [01:09:12] Speaker 1: All right. That's a very important word. It's definitely a time. Work on that. You know, to understand the market. See what stocks are working or not. I've had a lot of fun, Webby. Me too. Nice talking to somebody who is on the wrong side of Sammy Hagar's speed limit. [01:09:27] Speaker 2: Listen, Sammy Hagar or David Lee Roth or Gary Sharon. Which one? You just tell me now. [01:09:34] Speaker 1: No, no, no, no. I'm a mix because I like a mix of both of those things. It's a little bit like saying, you know, like, you know, so it's like a team that has a great run, you know, like Brett Favre, you know, or, you know, or, you know, the Brett Favre era or the later eras. You know, like there's the whole eras there. So I prefer both. But I'm just saying I'm not 55 yet. So I'm just happy for that. [01:09:58] Speaker 2: Oh, the 55. You're not. When is your birthday? When are you going to be an old man? [01:10:03] Speaker 1: It's in December. It's in December. So it'll be, it's not long. I'm just going to. [01:10:07] Speaker 2: Oh my gosh. But you've got more gray hair than I do. I've got gray hair in there. I do. I do. But you keep yourself super healthy and you always have. I've always been impressed with that. [01:10:16] Speaker 1: Well, I've been really impressed by all the changes you've made. And you're looking great. Thank you. And so with that, I'd like to thank everyone. Thank you so much, Mike, for your, for your insights. You know, this will be up on, you know, at YouTube. And it'll be on lots of other places and various, various stories. Hope everyone had a good time with this. And we will be back on Monday afternoon. And of course, Monday morning with IBD Live. And with that, have a good day and a great weekend.