Mixed Signals Before Big Earnings; CrowdStrike, Ethos, CSX, Microsoft In Focus — Stock Market Today

[00:00:00] Speaker ?: Let's get started. [00:00:30] Speaker 1: Good afternoon, everyone, and welcome to Stock Market Today for Friday, October 23rd. It's Alyssa Coram along with Ed Carson here. And Ed, perhaps some mixed signals to discuss what stocks are on your radar. [00:00:47] Speaker 2: Yeah, I'd like to take a look at CrowdStrike, Ethos, CSX, and Microsoft. [00:00:51] Speaker 1: All right, because we got four stocks today. Four stocks. [00:00:55] Speaker 2: It's just so much just going over through the roof. [00:00:58] Speaker 1: Yeah, hard to narrow it down. So we'll take a look at those four stocks. We'll also take a look at all the sector action this week. But where we kick things off, the major indexes. So we'll go there first. Here's a look at the NASDAQ composite. A bit of a tough week after last week's tough week. So on the day, the NASDAQ down about two tenths of a percent. But you can see that brutal decline on Thursday, putting the tech heavy index down about seven tenths of a percent for the week. A downside reversal. So an attempted recovery earlier in the week, but finishing at the lows. Meanwhile, we had the S&P 500 down about a half a percent for the week. So this also looks like an undercut of some areas and a test of another that we will talk about. Ed, the Dow on the day hit the hardest down 1.2 percent right back at the 50-day line. And small caps down about a quarter of a percent, but in the weakest position here, still below its 200-day moving average. So a roller coaster kind of week, Ed. But coming into this week, we were in a weak position. And it looks like we finished in an even weaker position. Your thoughts? [00:02:18] Speaker 2: Yeah. Part of the mixed signals is that, yes, you look at the indexes. Yes, especially the major indexes. I mean, the Dow rose for the week, but gave up most of those gains. And it was just disappointing, you know, to have that finish either Thursday or Friday to close below the 50-day line on the Dow, the S&P. And the NASDAQ, of course, looks the worst. I mean, I sometimes compare markets to like a Rocky II moment where the fighters in Rocky II both fall to the ground. And then they both try to get up on the ropes. And Apollo Creed is the first one to do it. And he gets up there, and it looks like he's going to stand up and then falls back. And that's – and so it seems – because it looked promising. I think that's also dispiriting. We had that move on Wednesday. Look, here we go. We had a positive reaction to SpaceX, you know, and the capital spending there. But then we really sold off on Meta once again. But on the flip side, you look beyond the indexes, and we'll talk about it. But there's a lot of things going right with the market, too. I mean, so it's – you know, if you look at a lot of sectors, there was a lot of strength outside of AI. And so it's hard to say it's a bad market, but you can't say it's a good one either. [00:03:28] Speaker 1: Exactly. So perhaps some reasons to be optimistic and something that we were talking about on – or, you know, nearing those lows from the August and September timeframe, is that what we need perhaps then to see a move higher? But like you said, I think a lot of it also depends on what's going on at the sector level. You could have a choppy NASDAQ or S&P, but if you see areas that are working, you know, maybe there are still opportunities out there. It's just how to take advantage of those in a way that's appropriate for the risk-reward scenario. [00:04:11] Speaker 2: I think that's very important. Yeah, there might be some opportunities, but you don't go in there like it's, you know, like it's a candy store and you go running in. You know, like, yeah, it's definitely being nimble and choosy. And you have to think about what's your overall exposure level and how much exposure you want to particular sectors. But, yes, I agree. [00:04:28] Speaker 1: Okay, let's take a look at the S&P 500. Here's the SPY ETF, and it looks like SPY closed around $759.96 on the day. And I'm just going to do a track price to the upside reversal from October 1st. The low there is $758.79. So we're right there, Ed. [00:04:48] Speaker 2: Yeah, I mean, so maybe we get a shakeout here kind of situation or not. I mean, so it's interesting, you know, that's the thing about a test. Sometimes you pass and sometimes you fail and we don't know we're at these key levels. And if we fall below that, then you can see below that. There's always another test, you know, on the downside or the upside. So this may be the test or maybe it's not. And it could be that we whipsaw around. I can imagine a crazy scenario where we fall almost all the way down to the one and then come back by the end of the day. I mean, so it could be, what's the test? But anyway, it's a tough, it's a tough situation. Again, disappointing. There were some encouraging things going on on Wednesday. But again, a lot of the damage was in AI. [00:05:32] Speaker 1: Yeah. Wednesday looked like the S&P was set up potentially for a move higher here. So it seems like you talked about there's always another level, right? So with the S&P in a bit of a stronger position versus the Nasdaq, it seems like a little focus here on the upside levels might be worthwhile. So we have the 50 day line and the 21 day, which are basically converging at this point. And then I think that Wednesday level is is a notable level to conquer as well. Roughly lines up with that downside reversal that we saw last week. And it would also be roughly around a trend line break. So at the index level, that would be the kind of action that I would want to see as encouraging. But what about you? [00:06:21] Speaker 2: I completely agree with that. And if we got above those levels, I think you would also suggest, not a guarantee, but suggest that maybe you're seeing some breadth. I mean, that you would probably need a lot of things going right. Doesn't mean that everything's strong and you're buying every, you know, in every sector. But you'd want to see some breadth going on in an in AI and outside of AI, like all of it sort of moving. So that would be that would be that. But but we'd have to see. [00:06:46] Speaker 1: Yeah. And speaking of breadth, one measure that we look at is the RSP. Here's the equal weighted S&P 500 ETF. And I'm going to go to the weekly chart because we actually saw this up on the week. It didn't close at highs, but still up 1.1 percent is right at the 10 week line. So the sectors will tell us a little bit more here, Ed. But what's your take on the RSP? [00:07:10] Speaker 2: Yeah, I mean, this is pretty good. Unlike the major indexes, this closed above the 50 day line. So that's important. So I think that we've had three strong three, three solid weeks. And yeah, so again, reflecting that there's strength outside of it and there's some strength. There's not it's not just RSP. There's other areas like some big cap software names that are not going to be in this or not really heavily weighted in RSP. But there but nonetheless, this is reflecting. Obviously, you can look at that long term RS line. Is this really going to be sustained? We haven't really seen an upside to this for long periods. We did from April to June, but everything was flying then. So that was a great time for the small caps because the market was really flying. But it struggled to outperform for quite a while. [00:07:58] Speaker 1: It sure has. And we are in the thick now, Ed, of earnings season. So I do want to take a look at the Nasdaq 100 here. Very similar to the Nasdaq composite in a weak position. And like you said, meta downside catalyst on Thursday. What should we be thinking about in terms of next week's big earnings reports? Is the A.I. theme going to be dependent upon the reactions to some of these major reports? [00:08:31] Speaker 2: I mean, it seems like it. I mean, of course, there's all you know, there's I mean, just to rattle off some there's Microsoft, there's Google, there's Amazon, there's Sandisk, there's Intel, there's SK Hynix. I'm sure there's a bunch of others like, oh, Caterpillar. That's right. That's an A.I. play. I mean, there's a lot of other things that are not too, like Eli Lilly and other things. But yeah, there's a lot out there. And it's really tricky because it's I think markets want everything. They want to have huge capital spending to make sure that A.I. spending is continuing, you know, for that thing. But they also want the companies themselves to be, you know, getting a return on investment. They are not waiting, you know, and they want to see cash. And we'll talk about the things. But and, you know, they want to see, you know, that that's an issue. And I would also caution. Last quarter, we saw some positive moves on earnings, and then a lot of them fell back after a day or two. I honestly feel like the market has different things. They'll say, oh, look at this. This is so bullish. And then and then the same information, they look at it a day later and they go, I don't really like that anymore. I mean, because there's a lot of different things like, you know, that happened with a lot of the hyperscalers last time. You could argue it happened with SpaceX this time. Oh, look at this. It's so bullish. It's so bullish. And then wait a second. They're burning tons of cash. I mean, again, nothing. That's just the way it is. There's nothing unusual. Well, I mean, SpaceX is, you know, but so it just it just makes it tough. So I would also say that even if we get that big gain or even a couple of big gains, I would still again, that's where we talk about being incremental. Even if you think I want to get into something, I would still be cautious because it could be that the market will turn around or we'll get some positive readings from Microsoft and Google. And then Amazon will come out and go like, you know what? I just don't like that. And I know that's going for long. But it's just, yeah, just really going to be an important week for how things go. And it could whipsaw, too. It doesn't have to go in one direction. [00:10:22] Speaker 1: Exactly. So incremental decisions, managing risk. So even in some of these areas that we'll look at that look really compelling, all things to keep in mind there. Also adding to our view of what's going on in the market, Ed, look at this oil breaking out up 4.3%. So we're now back at highs with this breakout. [00:10:45] Speaker 2: Yeah, this is an ETF. So not everything. I don't think U.S. oil futures. And of course, there's contracts that change over. So that's part of the reason. Brent crude, maybe the international benchmark might be right at record highs. It's really high. And this also means gas prices are going to go up. So it's interesting to see some of these consumer names that have gotten an advantage on lower treasury yields. But it's like, you know, people are driving to these places. You know, you're driving to get things or the companies are, you know, logistics, fuel costs are an impact on them. So this is something that could weigh in. This is probably one reason why the Dow was down today, you know, and just sort of in the R.S.P. was down today because oil prices really coming up on there. And so, yeah, we'll see. Because another thing, in addition to the earnings, and it's not just this coming week, it'll be the following week, but that two weeks from now, we'll have the elections. And that could have a whole bunch of swings. And we could also have President Trump has hinted that he's going to attack Iran more aggressively after the election. So my goodness, the next two weeks, the level of uncertainty is extremely high. Mm-hmm. [00:11:54] Speaker 1: It sure is. And we're saying on top of it, every step of the way, it's always, it's never, there's never a dull day, right, Ed? [00:12:02] Speaker 2: No, not a dull day. Never. Some days are less dull than others. Let's put it that way. [00:12:08] Speaker 1: All right. And let's also get your thoughts on the 10-year Treasury here coming off again this week. And it's kind of interesting because not too long ago, rising rates, a pretty big headwind. But then when you see rates falling because of the AI debt fears, it seems like that's sort of changed a little bit. [00:12:31] Speaker 2: Yeah, so I mean, this is sort of a negative signal in a way. It's good for, at least in the short run, for all those sectors like housing and all those other places that are doing things. But yeah, it suggests that there's a lot, there's the thought that there's going to be a lot less demand for money, that there's going to be a lot less AI borrowing. And that has obviously very negative implications for AI. It could have negative implications for the economy because a lot of the economic growth in this country has been pretty closely tied to AI, you know, directly or indirectly. So, but, you know, in and of itself, the lower yield is a positive, but it's probably coming from some negative reasons. And this is also, again, if for some reason people get excited about AI again, the yield is very likely to jump just to return, you know, the norms. I mean, inflation data lately, the recent inflation data was hot and yet yields came down. So if we did return to that, so that's just something to keep in mind. We do have the Fed meeting this coming week. I know we just sort of forget about it sometimes because there's so much going on. Yeah, wow. The Fed's not expected to raise rates, but they're probably also going to signal one way or the other either that day or the next couple of days. Yeah, you know what, we probably need to raise one more time or we're in, you know, we'll see. Yeah, so it may not be a big market mover, but again, something else that's there to influence rates in the stock market. [00:13:49] Speaker 1: Absolutely. Okay, let's go to some ETFs on our radar. Here's a look at the consumer staples off on Friday, but a pretty big move, especially on Thursday. You really saw that flight to safety, the risk off. So we saw that turn on its head a little bit at the end of the week, Ed, but your thoughts on this pretty rapid advance considering it's the staples market over the last couple of weeks here. [00:14:19] Speaker 2: I mean, a lot of funds will shift money into defensive. They have to be invested, so they'll go into these safe havens kind of situations. So the risk is, especially with the defensive defensive names, I mean, we'll go look at some other sectors that are not so purely defensive, but the risk is that if things we go risk on, that these will just fall right back down. And so that's an issue. Today, we didn't see, and we did see some, we saw chips and software go up today, but so maybe that's part of it. And also just, I mean, higher oil prices are going to pinch that a little bit. Yields rose a little bit today, you know, obviously down a lot for the week. So, you know, yeah, this is just tricky because it's already made a big move. You know, it's just like how much, uh, it's almost like you're shorting risk by buying this. And, uh, so, um, and maybe that works. It's obviously worked for the last few weeks and just a matter of that, but obviously it could really come down quickly. So, uh, but though that this is, as Justin says, if this is going up, it's probably not good for, uh, for a lot of things that, you know, usually the kind of stocks that we're looking for. [00:15:21] Speaker 1: Exactly. And that's how I'm looking at this more of a, Hey, a breakout I want to buy. It's what's the vibe of the market, right? If we're, if we're seeing a defensive vibe, then that tells you a lot. [00:15:34] Speaker 2: Uh, we're huddling in caves with my graham crackers and my barrels of ketchup or something, you know, and Coca-Cola, I guess. [00:15:45] Speaker 1: Yes. Yes. Uh, okay. Good stuff there. Let's go to retail. This has also been an interesting area that we've seen perk up in terms of the rotation, whether it's some of the clothing retailers or even some of the restaurants. But this too, kind of like the Staples had a big day Thursday, came off some today, but still an area to watch as this rotation is unfolding. [00:16:09] Speaker 2: Yeah. So it's just something to watch out for. There's definitely some names that look better than this. I mean, XRT is sort of a combination of very defensive names. Uh, there's some nice trendy, more growthy type names. And so I think that's where generally I prefer to gravitate to growth anyway, but it's also, I just feel like. I don't want to be, those are stocks that are more likely to hold up in a, if the market turns to risk on, I mean, I'm not saying that they, who knows what will happen, but it just makes me feel a little bit more comfortable. There's definitely names in the retail and consumer space that have growth. Uh, that, that are, are right around buy points. And so that's, that's an area where you can nibble and step in, uh, somewhat. Yeah. [00:16:47] Speaker 1: And I feel like it can always change, but there are some sector or thematic ETFs that we look at and then really want to drill down. Okay. What's, what's in this, what's moving, what checks off all the IEBD boxes. I've never really used XRT for that. I feel like if you're going to have a strong retailer, it'll show up in our, our screens due to, you know, the, the revenue growth or earnings or the relative strength versus, Hey, XRT is looking good. Let me see what's moving in retail. [00:17:19] Speaker 2: I completely agree. I'll look at say an SMH or an IGV or a cyber and just to get a vague sense. Oh, okay. How are things going? But yeah, there's just, it's just too disparate. You know, this won't tell you that you wouldn't know that there's a lot of retailers are doing well because this looks like just a wild little chop fest going no sort of going nowhere over the last several weeks or months. So with a, with not a very good relative strength, but there are names that are looking pretty good. I completely agree with what you're saying. [00:17:46] Speaker 1: Yeah. And then let's also take a look at healthcare. Here's XLV. I want to go back to the weekly chart actually. And take a look at this following up on last week's breakout up another one and a half percent for the week relative strength improving here, maybe not the best long-term relative strength, but over the last couple of months, quite notable. And this, I would say was really on our radar right at the turn, clearing this trend line. But it was this last week, week before last or so. Eli Lilly looks very similar to this. [00:18:22] Speaker 2: Yes, very similar to that. [00:18:24] Speaker 1: Very similar. And we can also take a look at XBI, more in the biotech area. This is looking weaker right now versus the IBB, how their weightings are, the percentage of the weightings are a little different here. So IBB, a setup that we talked about on IBD Live this morning, a way to play the biotech space without that single stock risk, which, Ed, you know, Moderna, for example, this week, late in the week, a pretty big drop. So if investors want to play this sort of hot growthy type area, I know you say medical a lot of times is kind of at that intersection of defensive and growth. Well, maybe one way to look at it right now is through the ETF lens. Yeah. [00:19:15] Speaker 2: And IBB, I mean, especially with the more, I think this might be more, not as big. And so you're probably going to get it more development stage or revenue stage biotechs in here. So, but, and this is, that's especially a good way to play those names, I think, because there's that existential risk. Whereas, okay, like an Amgen or some of these other companies that have drugs, it's like, okay, there could be bad news and it could sink a lot, but it's not going to go fall 50%, 80%, which can very well happen with development stage biotech. So, yeah. So there's some mixed messages here. Decent week for the medical, some in a better position than others. But yeah, there's a lot of earnings reports for the drug dryants and then the biotechs over the next couple of weeks. [00:20:01] Speaker 1: Yeah. And I think this is an area that you've talked about, Ed, in the past where a little different than the dynamics in the chip sector, where you can get a group move on sort of for the same, roughly broader reason. Whereas within medical, they're all so different, but perhaps the one thing that might be tying this group together right now, I'm sure there are other reasons, like, you know, the defensive growth kind of angle, but also AI indirectly sort of helping fuel innovation in this space, not saying that this move is tied directly to that or mostly to that, but just something to think about here. So how are you thinking about sort of this group move versus looking at the individual leaders? [00:20:48] Speaker 2: I tend to prefer individual leaders just because it's just hard to know. But, you know, if I'm not sure what to do with things, especially early on in a rally, you know, I might do a sector ETF like this because like, I don't really know. I'm not sure. And I don't want to get burned by some 10% reversal. That would be a way to play it, especially. So it's often where I utilize money early on in a rally attempt would be in a broad market or a sector ETF like like IBB. [00:21:15] Speaker 1: Yeah, well, speaking of, I mean, if with the NASDAQ looking how it's looking, not saying that we, you know, are looking at it exactly as a correction of any sort at this moment. But we have come down a good amount there and we need some repair work. So in terms of that, looking for, you know, an intermediate term or shorter term shift in the major indexes as this is setting up, that makes sense. And then let's take a look at financials. Here's XLF, some repair work being done here this week. [00:21:51] Speaker 2: Yeah, and there's definitely some different levels of strength within financials. I mean, the banks had a decent week, probably because of lower yields. It was like, okay, that might encourage more borrowing. Maybe not an AI, but, you know, especially, you know, like, hey, if you want to borrow some money for any other business or for a home, that's a positive. But insurers are doing pretty well. We saw KIE, and there's a number that were breaking out. So KIE is that, but there's a number that are at, including, we'll look at one. But there's a number of them where we're breaking out or right around buy zones. Again, very often very defensive. Not the one we're going to look at isn't defensive. But, you know, yeah, I mean, insurance is pretty defensive. And so that's also telling you about the market. There was a weird stretch a couple of years ago. There was a lot of growth in the insurance industry. But that, I don't think, is particularly the case right now. [00:22:39] Speaker 1: Got it. Yeah, we have seen a number of these popping up on our radar. And we will get to ethos in a bit. Two more ETFs said. We're almost through this section of the show. Going a little deeper, rolling up our sleeves on this Friday. Here's a look at IGV up 1.7% on the day. So some notable action underneath the surface in software today. And one of the growth areas that's holding up pretty darn well. [00:23:08] Speaker 2: Yeah, and so while it was dispiriting to see how the indexes rolled over, but this one bounced back from a very dispiriting sell-off last Friday or so and came back. And it's basically now at the top of that area. So, yeah, there's a lot of names in here that are holding up. And back, what we're so dispiriting is that the big winners were getting just hammered that day. But it's actually broadened out because now those leaders have come back. Some of the gigantic software companies are around buy zones. And then we're seeing some niche players and property or payroll stuff. There's a whole lot. In some ways, software has a broader rally than it's been this whole time, even though we've been talking about software makers. It used to be, "Okay, there's four or five. Oh, okay, there's 10. Okay, maybe there's 15." And now it feels like there's 20, 25 plus names that you could rattle off pretty easily. And there's probably much more. But it just feels like software has broadened out. So if you could say, "I don't want to buy these defensive names." It's like, "Well, software seems to be the place that you can go into and find actual winning stocks right now." [00:24:22] Speaker 1: And then let's also take a look at SMH, the chips. Thursday was just pretty terrible for the chips. And SMH now down at that 40-week moving average, a long-term support area after declining 2.3% on the week. So three weekly declines in a row here. We'll see. We'll have pattern recognition do the math for me. 16% decline, or at least depth of this handle in the last couple. [00:24:52] Speaker 2: I wonder if that handle is even going to be still valid at this point after this week, because it just feels like it's so deep that it shouldn't. I'm not sure if it's above the midpoint anymore. But yeah, that was just really the last few weeks have been so punishing. And we actually haven't had that many chip earnings. It's big on the concerns about AI financing. It's like, who's going to buy their chips? Not now. The earnings will be fine this time. They'll probably be fine next time. The concern, of course, is 2027, 2028. That's what's driving all this, the thought that, you know, and some of that circular financing. Oh, well, what happens? All those neoclouds. So yeah, I mean, this is an important area. There's that, you know, there's a lot of, you know, that 200-day line. See if it can hold that. And the tech giants and what they have to say is going to be really important. Even though, again, not that many chip makers or Intel reports, but not that many are reporting this coming week. [00:25:43] Speaker 1: Mm-hmm. I also think something notable about Thursday's decline is that we did break below the lows from the last couple of months. So yeah, no longer finding support where it was over the last couple of months there. Before we move on to the individual stocks, Ed, I just want to tie a bow on this point of mixed signals and maybe the individual stocks will sort of strengthen the evidence of that. But I know you were looking at the sectors through this mixed signals lens. So is it really looking at the strength in software and maybe some of these other areas giving you that optimism or at least, hey, there are some compelling areas to watch? It's not all doom and gloom out there. [00:26:29] Speaker 2: Oh, absolutely. Absolutely. There's a lot of areas. I mean, outside of AI, there's a lot of sectors or at least a lot of stocks within a lot of sectors that are acting well. I mean, if we just stripped out AI from the market, this would be a pretty strong way. I mean, it wouldn't be the most amazing market, but I think, oh, look at this, RSPs over the kind of thing or some of those things. So, yes, it's just that all the indexes, major indexes are below their 50 day lines. The Russell 2000 is still below its 200 day line. So, you know, it's like there's a level, there's a limit to how much it is. And there's always the concern with the divided market. Will it all lead together? Will they all lead together or will they all fall apart? Will they all, you know, will the weakness in one area drag it down? Or, you know, the other thing is, like, you might pile into defensive growth names and then we go risk on and then all the things you just bought into reverse. You could have sector rotation. And I think the potential is magnified, not just with earnings, not just with the election, but with the potential for big moves in oil prices and big moves in Treasury. So you could have just enormous violent swings. Maybe we won't. I mean, I don't know. We could continue what we're doing. But again, so I just think that you can nibble and go in there. But again, it's even more. So we talk about even in good markets, going incrementally, if it's a good market, you'll very quickly be fully invested. But this does not feel like you still, I think, even if you go incrementally, you still want to have a lot of cash. It's just not a market to be stepping, you know, is that's the kind of market we're in. [00:27:56] Speaker 1: Yeah. Just not bloom energy, not bloom energy. At least not right now. It was blooming at one time. Let's go to, you talked about the strength in software. CrowdStrike, a notable mover today, up 8.3%, a little bit of volume behind today's move, getting back above the 21-day round number of 250. So, you know, for people who like buying off of support around the 10-week moving average, this stock did just that. I guess my problem, Ed, is just the violent decline in the prior week. You know, it was down 17% last week, closing at the lows. But, you know, this was a great looking move today. [00:28:45] Speaker 2: You know, I completely agree. And it's all, it has bounced off the 50-day, 10-week line a couple of times. I suppose you could try to get around that by saying it was in the spirit of an ascending base. And so, from that perspective, this is the first test, I don't know. I mean, so it's not, it's not ideal. And that Friday drop and that whole, that Friday drop came after several days. So yeah, it was a horrific week. I mean, yeah. Today it recovered, software recovered. And today it bounced off that level. I think especially maybe when it went above the 21-day line, that was the opportune time to get it. Because, you know, it's already now getting a little stretch from that 50-day. You know, again, if we have a violent move, well, where do you sell? I mean, you know, so you just have to keep that in mind. Yeah, there were a lot of names in here. So maybe, again, this would be something where you say, I want to do cyber instead, C-I-B-R. But, you know, that had similar, I mean, it had a bad week too. You're not escaping that, I mean, last week. But that one also. So there's a number of names in here. But yeah, I thought CrowdStrike, there were a lot of names that may have already had some buy signals and others that are coming up. This one, I think faster buys signal. But again, yeah, you're right. And that makes it, that's part of what makes it tough, is that even where there are some generally positive trends, it can be, there's, the charts often show a lot of volatility as well. [00:30:09] Speaker 1: And not to mention, I feel like for some IBD style traders, including myself, I have a tough time buying a tech area when you see the NASDAQ composite looking how it's looking. But maybe, maybe there can be a way to profit from these names that are clearly acting different, or at least this week acted, acted differently. [00:30:37] Speaker 2: I think that's a good point. You know, the divided market is even more so within the growth, you know, when growth is divided, can that really be sustainable? It's one thing for software to lead, but for chips to be falling, falling, you'd at least like chips to be rising in maybe a laggard format. Yeah, I agree. It's, that's part of what makes it tricky. Do you, do you ignore software strength or do you, you know, because of that, or how much, you know, or, you know, or do you ignore the chip weakness? It's, it, there's not a clear answer. And that just comes again, a lot of mixed signals. [00:31:09] Speaker 1: Yes. Back to the theme of the day. Okay. Let's go to life. We were talking about this breakout this week, all week long, and even the setup heading into the week. And here's a look at the weekly chart ended up going up 15% this week, Ed. That's pretty great for an insurance name, but not your typical insurance stock. [00:31:32] Speaker 2: Yeah. So it's, it's getting some growth in there. You know, it, this is in the growth phase. So, I mean, maybe it's someday it'll become a nice boring stock in the insurance space, but not right now. And yeah, it broke out basically from essentially a handle. I think that was the best time to get into it though, you know, uh, but it's still not that far if it, especially if it pauses here for a couple of days, uh, it's nice that some other names in the travel space, the insurance space, I was thinking travelers, uh, so that are around buy points, but this one's the growth name, uh, there are earnings in a couple of weeks. So keep that in mind. [00:32:09] Speaker ?: Yeah. [00:32:09] Speaker 2: But, you know, uh, again, I like the shallow base. There was a deeper base. Uh, you know, I guess you could, sorry, there's been two deep bases, I guess, you know, there's the IPO base sort of, or like, but now you're getting a nice tight base after a bunch of ants. You know, so that's often, you don't often answer a signal that you're going to top soon, but you really want to pay attention to the next thing. And so a nice tight, tight base, right on support of the 21 and 50 day lines. There's a lot of things classic about this. I mean, I'd like to see, you know, profitability really in there. Uh, and it's, uh, but so it's not, it's not perfect, but, uh, technically a lot of things really looking good about this name. [00:32:50] Speaker 1: Mm-hmm and earnings coming up. It looks like in 10 calendar days. [00:32:56] Speaker 2: Yeah. [00:32:56] Speaker 1: So we will keep that in mind. Here's a look at CSX earnings mover in Thursday's session with earnings growth accelerating up 30%, the move on the day up about 7%, which is pretty great. Considering that this stock's average true range is 1.8%. So a pretty large move and clearing a trend line, getting above the 50 day line. So potentially actionable here. What are your thoughts as we do see some, uh, generally improving fundamentals said. [00:33:33] Speaker 2: Yeah. So the economy is doing pretty well. And while high fuel costs do affect the rail operators, they're able to put some fuel surcharges. And I think trucking firms are more affected by it. I mean, they're, they're really affected by the fuel costs. And also I think the trucking industry faces some trucking shortages, driver shortages. So all of that is contributing to giving, uh, rail some, you know, a bigger share of, and the economy is that the goods travel traveling is doing pretty well. I think the trend line, the 50 day was a place to buy. Uh, it does seem like it's pausing right around the short term ledge of like 52. So, I mean, if you got a handle that formed, you know, if you could form a handle around this area, I think that would be interesting. Uh, also, I think this one looks the best of the bunch, but UNP and Northrop Southern also had earnings also, you know, they also beat, and they also came above their 50 day line. So again, showing some strength within that. It's not an enormous group, but the big players are all sort of showing similar fundamental and technical action. Uh, so yeah, so this one is not going to be crazy wild. Uh, the revenue growth is just 10 tends to be just okay. Uh, so again, this, but it can go on some decent runs. It had a really good run for a while there. Uh, maybe it could be ready for another run, you know, you know, you know, for, for some period. So just have to know what you're getting with a stock like this, but it's, it's acting pretty well here. [00:34:59] Speaker 1: Yeah. It's chugging along. All right. Let's, uh, last one for you, Ed. Microsoft. We've got earnings coming up next week. Last quarter fueled a bottoming base breakout here. And the stock is hovering just above the 10 week line heading into next week's report. [00:35:20] Speaker 2: Yeah. If you go back to a weekly, I mean, you know, there were sort of several weeks of trading that sort of quasi flat base. It didn't really quite do it, but you could have used that sort of a sort of a base on there to buy off of there. It's pulled back to that. If you go to a daily, you can sort of see it sort of pulled back to the top of that range of kind of situation. So, uh, and this one just looks better than any of the other mega caps right now. A lot of them other, they sold off. What's notable is I think, again, what Microsoft did. Okay. Yeah. They had strong earnings, but a lot of folks did. But last quarter, Google and Amazon burned cash and Facebook made a barely generated any cash. But Microsoft, yes, their cash, their free cash flow declined, but it was still like, I don't know, something like 10 billion. So I think that that was comforting. So in the context of, we'd like to see some cash that really matters. And so that'll be important. Uh, I mean, cause I know this also in software, but I don't think that's really how it's viewed anymore, but I, so it's still throwing off new cash, which I think is really important for investors right now. Uh, I can imagine if it bounces from here, or if it pulled back a little bit more to the 10 week, 50 day line moved on earnings, this could be actionable. I mean, this one we'll have to see, you know, the, uh, how's the cloud computing growth? There's are, are they getting more buy-in with their revised co-pilot? You know, again, I want to see that return on an investment. Uh, and we want to see all that from all the other names, but I think this one is the best situated right now. Again, we'll see the report could be very different. Uh, but this one held up in a way that the others did not. And a lot of the others had bounces, but then didn't hold those bounces the way Microsoft did. [00:37:02] Speaker 1: Yeah. All right. Good stuff, Ed. It'll be interesting to see the earnings reaction next week to that. And so many more that you rattled off just off the top of your head at the beginning of the show. And you and Rachel, uh, the earnings cheat sheet episode did drop this morning. So we encourage everyone to check that out for a more in-depth look at what's coming up next week. Everything that matters to investors. As we wrap your final thoughts for how to prepare for the week ahead. [00:37:33] Speaker 2: Yeah. I mean, run your screens, uh, you know, if the market does take off or, or you see certain sectors picking up, you know, there could be opportunities to be adding stuff. But again, it's more preparing. I mean, it doesn't mean that you have to be like, boy, I want to go in on Monday and I'm buying a lot of stuff. I think you want to maybe be pretty cautious, especially heading into those big earnings. You know, there's a lot of, you know, out there. So if you do things, but you want to be ready for later in the week, uh, to either be buying or selling, uh, depending on the conditions. And it's just an open question about what that is going to entail, honestly. Uh, so yeah, be prepared, uh, stay engaged, but definitely be patient. [00:38:13] Speaker 1: Sounds great. Ed, thank you so much as always. Appreciate you joining us on a Friday. [00:38:18] Speaker 2: Thank you. [00:38:19] Speaker 1: Two Fridays in a row for Ed, lucky audience. All right. Thanks to everyone for tuning in. That is it from us for this week. We hope you have a great weekend and we'll see you Monday morning on IABDLive. Investors.com/IABDLive for all the details. Have a great weekend. [00:38:43] Speaker ?: Bye.