THE PRICE ACTION DOESN'T LIE (06/05) Today's Stock Market Analysis

[00:00:00] Speaker 1: Blue cloud trading through the night. All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. The chip rollover is many of the biggest names now in the group continue their big sell-off. We do have buyers, though, on that weakness on this desk today. We'll discuss the markets at large. Joining me for the hour, Steve Weiss, Jenny Harrington, Bill Baruch, Kevin Simpson. Check the markets. We do have some weakness today across the board. Take a look at the NASDAQ. Almost down 2.5%, a near 650-point decline. As many of those names, as I said, in the chip space, Micron, AMD, Intel, Broadcom. Let's show you exactly what's happening right now in real time because they're all under significant pressure. Weiss, I think the question everybody is asking is, you know, did Broadcom either spook the market in some sense or was it just enough to cause a rollover in these names that some had been warning was inevitable, given the runs that they all have had? [00:01:15] Speaker 2: You know, the bottom line is, I don't know, I don't think anybody knows, but I'll give you my analysis and I share it with you, which is that I did think it spooked the market a little bit. Well, let's keep in mind they met their numbers. They just didn't increase. You know, the miss was really minor, but they really met them and they talked about demand being strong throughout the year through 27. However, everybody expects companies to come out and report better than what they were guiding or better than what the streets. You never know what the whispered numbers are. So the other narrative is everybody talking about, well, we got another year to go, or maybe we got another two years to go, but they're looking at the end of it. So people are thinking, you know what, I don't want to be the one who turns out the lights, so maybe I'd take some off the table. I don't think people necessarily selling their full positions, but they're selling enough with the backdrop today of really strong job numbers. And I think that's exacerbating downside. So here we are. So the question then, is this the beginning of the end or is this just another opportunity to buy the dip? And again, I don't know the answer to that, but I think it's another opportunity to buy the dip. [00:02:31] Speaker 1: Maybe Broadcom's biggest misfortune, Kev, was the fact that they simply came after Micron, Snowflake, Dell, HPE, in which every single one of those, the move after earnings went like that. Right, straight up and to the right. 20%, 30%, 30 plus percent moves in a single day. So when you start doing that and then you're the last person standing that doesn't do that, this is perhaps what happens. I mean, the question is whether dip buyers are going to come in and when that happens should be the determinant factor of whether this is, in fact, the start of something bigger or just a few days of settling and pulling back and then reassessing. [00:03:21] Speaker 3: Scott, I love your point. I hadn't thought about them being kind of last in line in that reporting segment because as we approach some of these IPOs, certainly SpaceX next week, I think a lot of people are looking to take profits in some of these things. Since the March lows, AMD, Micron, Intel, to your point, they're all up meteorically. [00:03:39] Speaker 1: Crazy numbers, right? Crazy numbers, AMD from the March low up 150%, Intel, 152%, Micron, 188%, Marvell, 228%. I forgot to mention Marvell in that mix. Throw it in the mix of those that had reported and had rocket ship-like moves on the backside of those earnings reports. [00:04:00] Speaker 3: I mean, that's unbelievable, truly unbelievable. [00:04:02] Speaker 4: And you know what? They're up even more, by the way, since the beginning of the year, which makes it more unbelievable. Okay, sorry. [00:04:08] Speaker 3: But here what you have is you're on the precipice of an IPO, so people are looking, where are we going to raise cash? In the old days, you would have cash and you would raise it from the things that were real winners. We haven't seen a cycle of IPOs in a long time, so I'm not sure how quick the retail investor is going to come in and buy the dip. I think maybe they hold a little bit of dry powder until next week. I like your ad here. I think it's a good investment, but I don't know that we're going to see the balance that we've seen in the past. [00:04:32] Speaker 1: Here's the problem with the ad, okay? It was an attempted ad, and he got stopped out in the pre-market, which shows you that maybe today was too early to try an ad. You didn't attempt, I mean, you didn't think, I'm assuming, when you added it in the pre-market today, that the stock would be down another 6%. You put a stop in, and then you get stopped out, and now you're out. [00:04:56] Speaker 2: Yeah, and the reason why I put a stop in, I bought it yesterday, and I thought there's a little risk to it, but if you take a look, and I look at technicals, I don't really have them define what I do, except on the downside where there's support, because of people I'd build the moving markets on technicals. So if you take a look at where the support was, it was just over 400. Below that, okay, the next support line's about 350. So I bought it comfortably above that support line, which means I lost money on this trade. It was a small trade I was going to leg into more, but I didn't want the risk, if this is more than just a couple-a-day event, of seeing that go down another 15%. [00:05:37] Speaker 1: Well, that's the trade school part of it, of, you know, using stops to limit downside, especially in things that are potentially volatile. Like, Bill, this one has been, you own the name. I mean, it did get reiterated today by $5.95 is the price target. $5.95, it's about $3.94. $5.95 at Rothschild and Redburn. So, you know, there are those who are assessing this and suggesting you should get in with this now 12% near decline on the week. [00:06:08] Speaker 5: Yeah, we own the name at about a 4% weighting, so it's up there for us. I'm looking at, I said yesterday on the show, a $3.55, $3.60 is going to be a huge support level. So we're not going to do anything right now. I mean, in fact, we're more focused on the rotation is what we've been doing. I've been on the show over the last couple of weeks. We've trimmed tech. We've trimmed some of the top names we've had. We've been buying names like Lilly and JP Morgan and Berkshire. And so we've been rotating a bit and being prepared for this. I mean, at the end of the day, this rotation is what is needed in order for the market to really take its next leg. Every day I get in, I take a look at what are currencies doing, what are rates doing, and then, you know, if rates are going up, then you're going to have that impact on equities. That's what we're beginning to see today because it's a non-farm payroll day, and this was a strong report. But I'm not buying the pricing in of a rate hike right now as well. Yeah, now we're pricing in a full cut, right? [00:06:59] Speaker 1: I mean, a full hike, excuse me, Freudian slip. Whether you actually believe that or not is another story altogether. I thought, and I was really interested to hear from everybody first and then get to Jenny, because you have the least amount of tech exposure on the show today and probably in our orbit, you know, towards the lower end of tech exposure. Are you looking at this, the makeup of this market now and thinking that you'll finally get a whack at some things that may be opportunistic for you now? [00:07:29] Speaker 4: I sure hope so. So, you know, I have a very different response today. My screen's lit up in green. I've got Kimberly, Clorox, Bristol Myers, Pfizer, Realty Income Stopper, like everything's green on my screen. And as you know, we sit patiently on the sidelines and look for a pullback where we could maybe one day finally own a Google, you know, maybe one day finally own an Apple. Because the cash flows, even with the CapEx, are quite amazing. So, Scott, I am looking for that and saying like, hey, maybe if this goes too far, it will be, you know, it'll be where we get in. I was at a cool conference yesterday, it was called Macro Minds, and one of the speakers reminded us, which is almost all the alpha is generated in the terrible distressed moments. And I know that's always been true for me, too. You know, in terms between distressed moments, which you don't get very often, you just kind of sit there and like you add a little and you trim a little and you buy a little. But the moments are made when you actually have cash and you're prepared and you have a liberation day, which is when I was able to add that microchip, you know, or you have a pandemic. So, we're sitting here like, you know, holy cow, maybe this is the beginning of something where we can get in. [00:08:30] Speaker 2: Well, thank you very much for that. [00:08:32] Speaker 4: You're welcome. [00:08:33] Speaker 2: Yeah. You know, just one other observation. So, you point out we had all these other companies report. They reported great quarters, but if you needed any more proof that this is purely a momentum driven market, right, despite that recent memory of all those companies reporting great numbers, raising their guidance going forward, raising price targets, one company underperformed and took it down. By the way, that company, this is not the first time that it underperformed relative to expectations because of their broad customer base, not focused just on AI. [00:09:07] Speaker 5: If you look back to October, the same sort of reaction to the market, I think it was October, where it actually knee-jerked higher initially, rolled over the next day, and it impacted the market. But there's a lot, again, I keep leaning on the fact that there's a lot more going on under the surface in the macro land right now that's driving what we're seeing. And I've been on the show a couple weeks ago talking about there's going to be a little bit of a June cycle peak from some of our proprietary models that we look at. And then you layer that into year two of a presidential election, you know, we may not go much higher than this from a broad S&P look, but under the surface, we're going to see these rotations, healthcare and financials. Again, I can't say it enough. [00:09:42] Speaker 1: The most critical question is, is this a real inflection point in what we've seen in the market? On that note, Mark Newton is the technician at Fundstrat with Tom Lee, says it is time to shift from growth to value, says that has reached an important resistance. So it's right to take money off the table in growth and favor value. I think growth likely gives way to value over the next four to five months, he says, in a move that should coincide with technology consolidating between now and October. Michael Hartnett over at Bank of America today talks about June swoon risks. The bull bear indicator has risen the third week of a sell signal by virtue of how he looks at things there. That suggests the answer to my critical question to you, is this an inflection point? That would suggest that it is. Agreed or not? [00:10:38] Speaker 3: I hope that they're right, because I have a tendency to buy more dividend growth companies than tech stocks. But I think the point's valid. One thing we didn't bring up in the conversation is crypto. And I know it's not a topic that we talk about every day, but I don't think we can talk about a momentum trade, a tech trade or the semis, without mentioning the fact that Bitcoin is down 50% from its highs. And to me, that's something that's a little bit deeper than just a passing comment. [00:11:03] Speaker 1: What's the message in that, do you think? You guys know this space pretty well. What's up with that? To me, oh. Yeah, I'll get to you in a second. What do you think? [00:11:11] Speaker 3: I think that there's a lot of margin calls there. I mean, if that's where the speculation is, and it goes back to my previous point. The people are raising capital where they have profits. At some point, they had profits in crypto, they had profits in Bitcoin. But when you see that going down, I mean, it's a testament to this risk on trade flipping the switch. And maybe that goes to the point of the analyst talking about the value trade coming on. [00:11:31] Speaker 5: Saylor sold his Bitcoin, or some, not his, but some very small but meaningful Bitcoin that I think it hurt the tape. I mean, I think it hurt some sentiment around it. We had iBit in portfolios, and we cut it, I think it was January. 75,000 was our line in the sand for Bitcoin. And when it broke it, obviously, it's kind of traded around it. But it shows you, technicals do work, and there was a lot of damage that it's still working through right now. There's just no fundamental story here. [00:12:00] Speaker 2: And we get reminded of that every day. Now, it's a legitimate asset to trade, but don't come to me ever and tell me that it's got a business use case. It's got a use case. We have the banks coming out, right, consortium of banks coming out with their own stable coin network with blockchain, which has been around since the 70s. Bitcoin didn't create blockchain. So that's another dagger in the coffin. And they don't need Bitcoin for, you know, for stable coins, right? They'll do it on their own, and it'll be much more stable. So what's Bitcoin used for? It's only used for social media. It's only used for people coming on and touting the business because they make money off the exchanges. There's no use for it. So it's dying the debt that it should. Now, I don't think it goes to zero. I think it's always going to be a trading vehicle because there are true believers out there. But nobody's been able to prove the use case for it. [00:12:52] Speaker 4: Yeah, I think when we think about the inflection point that you're asking about, and we think about Bitcoin in particular, I watch it every day. And I watch MicroStrategy every day because, to me, they've always been a leading indicator for risk appetite that's out there. And so when I saw it starting to fade maybe a week, two weeks ago, I thought that was interesting. So when we think about, Scott, your question, and we think about these stocks that have had these unbelievable 200,000, 300,000 percent runs in the last six months, it's not that they're mispriced right now. It's just the path that they got there. And I think the struggle for me is trying to tie up, OK, I believe in these chip stocks. I believe in the AI trade. But the price is hard to digest simply because of the path, not because the actual level. So when we think about who's entered them, I do think it's a marginal buyer that drove some of those up to the stratospheric prices that we've seen. And when I couple that up with Bitcoin and that fade, I think, OK, risk appetite's diminishing. People are going to get capital calls. Money's going to come out of that kind of risk on high-risk appetite. So to me, like, with the question of inflection point, that gives me more confidence that it might be an inflection point than anything else. [00:13:59] Speaker 5: I love that you turned to me when you mentioned chip stocks on big runs. But, yeah, I think— [00:14:04] Speaker 4: Well, you know technicals better than I do. [00:14:06] Speaker 5: And I think this is a very healthy consolidation in order to be able to take that next leg higher. And I think, again, from the macro viewpoint, we might be seeing peak rate hikes being priced in. I think some of the data earlier in the week, non-farm productivity, unit labor costs, the wage growth on today's report did not accelerate. It actually decelerated from— It's still high. It's still high, but decelerated from the way it was from the April number. And then the leisure and hospitality jobs, 70,000 added. I mean, guess what's coming here now is the World Cup. I mean, there is a lot of hiring now, so how much is the sticky of this? [00:14:40] Speaker 2: So if you think we're at peak rate fears, you must believe then that inflation is going to be under control in the second half of the year, which I definitely don't see. [00:14:50] Speaker 5: Well, we had a high CPI number, one. Three is a trend, so we only have one so far. But PCE came in, and it was contained. So let me—I'm looking forward to this. [00:14:58] Speaker 2: That's back half of the year when the forecast that oil resumes and stuff would climb because you can't get regards to what happens with straight oil moves. And we don't know that anything will happen with it. So you still need—even if it opens today, oil is still going to go higher. [00:15:11] Speaker 5: Well, a lot of the offshore storage has been pulled down, and, I mean, it's been used. So there's going to be an interesting situation in the coming months. But for now, you have to go with the data, and the way the data is trending is telling us that inflation, you know, from what we have right now is not accelerating higher. [00:15:27] Speaker 1: There's a multi-year low, by the way, on Bitcoin. You've got to go back to the fall of 2024 for, you know, Bitcoin breaching the 60,000 level, which it has today. It's obviously bounced a little above that. But nonetheless, that is a pretty good reflective chart of how this trade has been, choppy at best, and certainly of late, decidedly weak. [00:15:54] Speaker 2: A lot of 70,000 to 125 where it beaked was an expectation of Trump becoming president, an expectation of him legitimizing Bitcoin because it was large family holdings. And that was just all apparently hype. [00:16:10] Speaker 1: Well, even if it's not hype, I mean, there's just been a lot of competition, I would submit, over the last many months for other speculative assets that were related to equities rather than crypto currencies. I mean, if you want to put chips, some of the chip names in that area, maybe you got to an exuberant, euphoric place on the momentum, you know, in the momentum orbit where people who would ordinarily play the speculative side of the markets through crypto or Bitcoin, we're just simply doing it through semiconductors. Agreed. It was a losing trade. [00:16:53] Speaker 3: You're saying everything right. But when you translate it to the institutional investor and these guys were on to the point, they just never got there. If inflation is higher, whether it spikes or it doesn't, that's a problem because the Fed isn't in the position, obviously, to do any rate cuts. That's off the table today. As I've been saying for two weeks, we're not going to be cutting rates for the next year or two. But we don't necessarily need a hike. The bond market will dictate that themselves. But what we haven't talked about is valuations. When we're in a period of higher inflation, higher interest rates, you get compressed valuations. And it is affected by tech stocks more than anything else. [00:17:27] Speaker 1: I see move. Hang on. I want to get to some moves related to what's going on in tech. I think it plays into the question that we've been asking today. You know, you bought more NVIDIA. Speaking of where the dip buyers, well, you know they're lurking. And you apparently are one of them as it relates to this name. [00:17:48] Speaker 3: A hundred percent. This is exciting because this is the first time that we bought NVIDIA in our flagship dividend portfolio. We've owned it in the growth strategy because it's a growth stock. But over the last couple of weeks, after the earnings report, they did a few things. There's four things a company can do with cash. And NVIDIA does all of them. They incubate other companies through CapEx. They manage their balance sheet by paying off debt. They buy back shares. They announced an $80 billion share buyback. And they increased the dividend to $0.25 a quarter, a dollar a share, which isn't a huge dividend, but it represents about a half a basis point yield. But prior to that, they were paying a penny. And the penny in my book is zero. So it's never really been a candidate for the strategy. So we look at this as an investment, not a trade. And why the dividend is so important, Scott, is that Jensen Wong, his board, wouldn't go out there and put a dividend in place if they didn't think that the AI monetization for NVIDIA specifically wasn't there for the long term. So I think this takes this company from a great trade that everybody watching the show owns to a position now that we can own more of a long term investment. [00:18:51] Speaker 1: So that's a buy the dip. And then there's a sell what's been a pretty good rip for Cisco, Jenny, right? Right. And you know, the positions get when they go up for an extended period of time by extreme amounts, the size they grow to in one's portfolio obviously becomes too hot to handle at some point. Is that what's behind this move in Cisco? [00:19:14] Speaker 4: So we trimmed yesterday, we trimmed Cisco in our growth strategy from 6.5% to 5%. It's up 62% this year. It's trading at 27 times. It's still growing at like 10, 15 times. But that's a real mismatch of its growth versus its price to earnings for a long time. And so we're sitting here and we're like, look, I believe in this company. You know, as tech grows, every bit of tech growth is ultimately going to need to use Cisco. That's terrific. But, you know, I always hear in my head that pigs get fat, hogs get slaughtered. You know, and I don't want to be a hog. I want to take a little off, put a little in my pocket and just have a better sized position. So I think, you know, I think that's what you could apply to all of your portfolios out there because a lot of these positions have grown from 3% at the beginning of the year to 9% and 10%. [00:20:00] Speaker 1: You know, financials are coming off their best day. I mentioned those because we have moves there too. And it's a trade that's been uneven at best. But financials coming off their best day since April of 25. So in more than a year, still the worst sector year to date is the group. Now, there's been some real optimism of late in the large banks, the investment firms like the Goldman's of the world. Right. Goldman had been above $1,000 for the very first time. We can take a look at it to see where it's at now. It still is. It's the lead on SpaceX. It's going to be part of the lead on Anthropic. And when the OpenAI IPO happens, whenever that is, you can figure that it's going to be in the mix there as well. The capital markets are wide open for business. M&A expectations are through the roof. You could have a record year. You trimmed American Express and Visa. Different conversation than a Goldman, but nonetheless in the orbit of the financials. [00:20:59] Speaker 3: Yeah, we own Goldman, we own JP Morgan for all the reasons that you just mentioned. We're all in on those. Visa and American Express, they've actually underperformed the XLF year to date. Yesterday, we saw a little pop in it. I still own them, Scott, but I needed to free up some money to buy NVIDIA. We thought, why not take a little bit of an underperformer and go ahead and get that money to work. So it's a little bit of repositioning within the portfolio, not a loss of conviction on the consumer, not a loss of conviction on those names. Heck, we've owned them for 15 years. But I think here was a situation where we were just looking for a better use of capital. [00:21:32] Speaker 1: You bought more Coca-Cola, which is interesting, if you're looking at the consumer and maybe more of a defensive play within the market. By the way, Morgan Stanley names it today number one. It's top staple stock. Why'd you buy more? [00:21:47] Speaker 3: Wanted to see how boring a stock we could find in a day like this. But the reality is, you've got a company that had earnings. The stock hasn't moved in three months. They were increasing sales, top line, bottom line, by about 10%. It's not getting rewarded for it. We get almost a 3% dividend owning it. And I like the analysts that are coming out here and making this a top pick. I don't know that you need to race into it and chase us here. But I think there's a lot of value. And if you're looking for companies that have free cash flow and you're focusing on balance sheets and companies that probably aren't going to roll over, I feel really comfortable adding to Coca-Cola here. [00:22:17] Speaker 1: Let's look into one more item before we take a break. You just turned your laptop to me, Weiss, and showed me a chart. Was that an intraday of the GLD or what was that? [00:22:24] Speaker 2: Yeah, GLD's down 3.4%, you know, 3.3%. I mean, how often have we seen gold, aside from the last couple of weeks, trade down on spikes in rates? Typically don't. So this market's a little, you know, wacky. Yeah. It's now broken through support. It's now down 20%, more than 20% from the high when traded 500. [00:22:48] Speaker 5: Gold typically trades lower when rates go higher. I mean, over the past year to two, it's been a little bit of an anomaly. I think the trend is going to be more sticky for gold to trade better when rates are going higher. But right now, this is the fact that we're pricing in a rate hike by the end of the year. Now, gold, just to note, too, broke the 200-day moving average for the August contract right about 4,500 earlier in the week. Now we're looking at a weekly close on the continuous futures contract below the continuous 200-day moving average at 4,420. I'm sitting here, you know, I run a metals fund, and so I don't have full positions on, but I still may sell some in the day just to manage risk ahead of the weekend, though this is the place I want to be buying to start next week. All right. [00:23:30] Speaker 1: All right. We'll take a quick break. Another move. And a name that got downgraded today. Show me Fiserv, please. Underperform. Don't see it that often. You just don't. Stock's down almost 4.5%. That's at BNP Paribas. It wasn't neutral. They say sell it. Target cut to 46. It was at 55. Jenny Harrington sees that and says, come on. [00:23:54] Speaker 4: That's right. You know me. I like to buy low and sell high. So it kind of goes to my comment earlier, which is the greatest alpha is generated in periods of distress, and that can be at both the macro level and at the stock level. So on Fiserv, here's where you stand today. Stock's been decimated, and it's because they had a problem with their Clover business and their Argentina business. The new management's been in place for about, you know, almost, maybe like three quarters of a year now. They've had two quarters now where they've been able to show that revenue growth has really stabilized. So what do you have? You've got a stock that's trading at seven times earnings as a 13% free cash flow yield. It's down 20%, which I like. They just reiterated their long-term guidance of 4% to 6% revenue CAGR. They expect to earn $12 by 2029. I think there's significant upside. If it trades at 10 times that $9, you've got a $90 stock, which is significant upside. I think at this price, it's kind of de-risked. And you know me, I'd rather be buying something when it's downgraded versus when everybody's upgraded it and there's no room for anyone to become positive. [00:24:54] Speaker 1: All right. I want to show you the NASDAQ. Just, you know, we're in danger of posting an eight-handle in terms of the point decline because we're almost down 800 on the NASDAQ. And almost three, that's 3%. The declines, for example, AMD, more than 9%. Broadcom now more than 6%. These are all lows of the day. Micron is a near 10% decliner. Broadcom more than 6%. Intel, almost 9%. So there's your point of reference for the weakest part of the tech trade today without question. [00:25:31] Speaker 2: And what you're thinking about now, at least what I'm thinking about now, is not about today. I'm thinking about Monday. Do I want to come in to Monday with the same positions or without hedging them, without covering them? Because we've seen this before, you know, where you get the setup, the market trades down significantly on a Friday, and then you get demolished on Monday. [00:25:55] Speaker 1: Well, I would say the last time that we, remember, what was it, a week or a couple weeks ago, we had, you know, three days of selling. Maybe it was a Friday, Monday, Tuesday. Everybody's like, oh, here we go. Here's the correction that we've been waiting for. And the buyers came right in. And it lasted literally three days. Yeah. And it was the old V-shape recovery that every single pullback in this market over the last couple of years has exhibited. [00:26:21] Speaker 5: Steve, you're right, and then typically this happens on Fridays, you see the selling and it takes, and then it goes in more Monday or Tuesday. But during the Trump administration, this time around, we've actually seen the selling kind of stop on Friday, more times than not, because people want to take that risk off ahead of the weekend. You don't know what comments could happen. We're in the middle of a conflict right now. And then we've seen some bottoming action come Monday. But here's the thing. [00:26:43] Speaker 2: And you have, you also have, you've got Iran out there, right? And even though Trump says he's not going to resume hostilities or bombing unless American servicemen put risk, you still have those, all that out there. All that's out there. But here's the thing, guys. [00:26:56] Speaker 1: Let me finish one. Let Jenny go. No, no, no. Let Jenny make the point. [00:26:59] Speaker 4: You're making it sound like it's broad-based. And to some degree it is, but it's also targeted. If you can put the ticker DVY, it's a dividend ETF that I like to use as, like, the other side of this, it's up. It is not universal selling out there. I see today as more of a rotation, more of a broadening, more of that Mark Newton. You know, maybe you sell growth and get into value now. I'm surprised to see, you know, even for me, I'm surprised to see the positivity in the value and dividends and that kind of area. To me, it says this isn't broad-based. It's a targeted sale day. [00:27:28] Speaker 2: Yeah, I would say that's pretty broad-based. [00:27:30] Speaker 4: Would you? [00:27:31] Speaker 2: I absolutely would. [00:27:32] Speaker 4: Okay, you would by dollar value. Oh, sorry, you mean the selling's broad-based. [00:27:37] Speaker 2: I mean sectors, you know? I don't know. Kev's loving his Coca-Cola today. [00:27:41] Speaker 3: Investor sentiment hasn't been this frothy since the great financial crisis. And you have a huge IPO, the likes of which we've never seen next Friday. I don't know that we're going to see the dip buyers that we've been accustomed to in the tech trade on Monday. [00:27:54] Speaker 1: So let's bring in Mike Santoli, the senior markets commentator, of course, the overtime co-anchor as well. Pick your event, I suppose, which you think could be leading to this. Is it positioning ahead of SpaceX? Is it positioning for a value move? Is it just trying to continuously now get out of some of these highest-of-flying chip stocks? I mean, what do your eyes tell you? [00:28:18] Speaker 6: Well, it's a sequencing of a lot of those things. I mean, I think the context is very, very important. And we talked about it coming into the week, probably even before that, which is, this is a historically, profoundly stretched leadership segment of this market, mostly manifest in semis and AI hardware. Massive amount of air underneath that group, a lot of, therefore, pent-up profit-taking space to be had. And so once that did have a downside trigger, whether it was broad, calm, or just exhaustion, then I do think it was, okay, let's rotate away from danger. Yeah, it was yesterday. Usually that works in this particular environment. I do think that a hot jobs number, yields going up and threatening to break containment, at least on the short end, perhaps, sort of scrambles the picture a little bit. And so, yes, there's an attempt to try and buy up some defensive and value and cyclicals. Things haven't participated. But I think that's mostly mechanical. Yesterday, you know, health care was up 3%, not because anything happened, but just because it was under-owned relative to the stuff that everybody owned. Big picture, S&P has broken its 20-day average. That's something, 7,500. We're well below that. The next thing I would look forward to say, whether this is anything more than a routine wobble in an uptrend, is the May low. It's like 73.30 or something like that. So we're still above it. So that's the tactical picture. But I do think you have to start asking, higher yields, running the economy hot, the CapEx going all out, you know, does it change the general equation of tech-led, you know, broadly disinflationary growth down the road? [00:29:52] Speaker 1: Going to be a really, really incredible next 10 days, I guess, if you want to call it that. SpaceX looming. Warsh's first Fed meeting is looming at a time where we're talking about rates backing up. Yeah. Economy may be hot. Remember the whole run it hot idea that the president said to Warsh's face, essentially, in the room. Yeah. When he was doing the ceremony when we were on the air live, right? [00:30:21] Speaker 6: CPI next week is going to tell you how hot the inflation piece of it has been. So, yeah, all of that in the mix. And look, I think the supply, the SpaceX IPO, there's no doubt that that's a handy excuse to say, you know, are we getting a little overexcited? Is it basically a seller's market? Is that what we're seeing? Is that mostly about exit liquidity as opposed to giving everybody an opportunity to own this business, which is debuting at one and three quarter trillion dollars? I think those are all valid concerns. [00:30:49] Speaker 1: Yeah, maybe you go to stairstep, too. It's like Broadcom's the first thing, and then it's the SpaceX, and then if things come in threes, the potential Fed meeting that's going to be consequential in language, if nothing else. Michael, thank you. I sent you a bit out earlier. I want to mention something. I got an email from Jeffrey Gundlach a few moments ago. You know, obviously, I don't care what side of the field you're on, equities, credit, whatever. Everybody's sort of thinking about the same questions of whether, you know, to what degree might we be or have been overextended in certain areas. He sent me a chart that he's been discussing with his own, you know, internal group. It's from a firm. I don't want to mention the name of the firm because I'm not sure if I can, if I'm allowed to share it publicly. But it looks at past periods of perceived market bubbles going all the way back to, you know, the 1800s, whether we're talking about the build-out, and the investing in railroads, the TMT era, the Nifty Fifty, utilities, Japan, and now to the current of the AI Big Ten, as it's being called. And you had a degree of concentration in every one of those past periods around the 40% level. And right now you're at about, remember, we've been talking about how concentrated and narrow the market's been, that the AI Big Ten in the here and now was about 40%. And that has traditionally, a chart doesn't necessarily tell a definitive story about where the next chapter may lie. But nonetheless, if you look at, if you're looking at past patterns, things that may rhyme, it's an interesting thing to look at considering some of these other periods of time in which bubble concentration was extraordinarily high. The numbers would suggest we're in one of those similar periods. [00:32:49] Speaker 2: Yeah, and I talked about it Wednesday. We've all observed at one point or another that this is unusual. And I was very clear. I was greedy. And greedy always gets you into trouble. Now, these stocks, even though, you know, microns down 100 today, down 10% or so, that's what it was over the last few weeks, last couple of weeks. So where are we? So I think that's a great chart and great point that Jeffrey makes. And there are lots of parallels to bubbles here, even though everybody always says, when you're in a bubble, everybody says, it's not like the last bubble, but their shared characteristics. [00:33:27] Speaker 1: And I'm saying, by the way, it remains to be seen as to whether this is a bubble or not. I agree. And it's critically important to mention that. [00:33:35] Speaker 2: No, it is. The demand is not slowing down. All the companies you cited, the earnings are still there. These aren't companies that are built on websites with no businesses. These are companies that are really building. [00:33:46] Speaker 1: Like John Walden was telling me on this desk the other day that by price action alone, there are things to be concerned about. In his words, the microeconomic effects of all of this outlay and infrastructure build and spending by the hyperscalers is real. The microeconomic impacts of all of that are real. Don't try and make the case that this is 90-whatever, because there are differences between then and now, at least as it relates to that. [00:34:20] Speaker 5: Taiwan Semiconductor has been very good at controlling the supply that's going out. And then this is not just AI. There is the power, the electrification, the infrastructure that needs to be built out. So it's really touching everything. This isn't just one little pocket real quick. [00:34:37] Speaker 4: From the bigger picture, you know that famous investment quote, right? The four most dangerous words in investing are, this time it's different. So you have to look at that and say this time probably isn't different. And if it's not different— Well, I think it is. [00:34:48] Speaker 1: Things rhyme. They don't necessarily— Then it's the first inning, okay? We'll just see. [00:34:50] Speaker 4: But it's not different in that it's new technology. It's revolutionary. Usually, technology doesn't actually replace jobs. But there is disruption. There's over and under supply. [00:34:58] Speaker 2: The main difference is there's a bubble in valuations, not a bubble in demand. The bubble in demand and strength was in the internet. [00:35:07] Speaker 1: Someone said there's no bubble in valuation. Because the earnings have been amazing, and the projections continue to go up. We'll do finals next. Closing bell today, Dr. Jeremy Siegel of the Wharton School and Tom Lee of Fundstrat, Stephanie Link as well. It's going to be a big hour. Don't miss it. Kevin Simpson, final trade. [00:35:27] Speaker 3: In a market full of artificial intelligence, I still like the real thing, Coca-Cola. [00:35:32] Speaker 5: All right. AbbVie back above the 200-day moving average. [00:35:35] Speaker 4: Coming off of Reet Week, Sabra, 6.5% yield. [00:35:38] Speaker 1: I debated cash or UnitedHealth. I'll go UnitedHealth. Well, we guys managed to find four-up names. I'll see you at three. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break out begins with what else? The tech sell-off and what it might say about the market's potential next move. We'll ask our experts over this final stretch, including the Wharton School's Jeremy Siegel, Fundstrat, Tom Lee, Hightower, Stephanie Link, all joining me momentarily. There's the scorecard with 60 to go now in regulation. Big selling in chips again has led the NASDAQ to its worst day since last October. All of the big recent winners, they are down substantially, especially from the chip space. AMD's down more than 10%. Micron's down nearly 12%. Broadcom has been a big loser on the backside of its earnings. Did it start this whole thing? We'll investigate further elsewhere. Well, there's green in the most defensive areas of the market today, like health care and staples and utilities. But let's get right after this market, this late-day slide, especially for Meta. That's new news. At least a report that it, too, is considering now an equity raise to fund its AI ambitions. Take a look at the stock. It's come off its worst levels, but nonetheless, it is a new story and a negative one, at least for the price action in this market related to tech. Let's bring in Hightower's Stephanie Link. She owns the stock. Fundstrat's Tom Lee is with us as well. Both are CNBC contributors. Hey, Tom, what do you think of this news? Certainly in light of the Alphabet news earlier this week, is this a good sign or a worrisome one? [00:37:17] Speaker 7: Scott, I think Meta's move isn't surprising because Google had a lot of success raising $45 billion in a very short underwriting period. And I think it's a reminder that these AI companies are building basically huge real estate infrastructures that aren't fully funded today. And that's why not only will SpaceX need to raise more money beyond its IPO and OpenAI and Anthropic and, of course, Meta and Google, but I do think they're showing a lot of promise in their investment today because there's been significant breakthroughs. So I think investors are going to give them grace, but you're right. I think Stephanie's right. This is not a – Meta's sort of financial profile is changing. It's changing from a free cash harvesting from their prior businesses to one where they're building land that could end up being beachfront property. [00:38:14] Speaker 1: What's this sell-off about today, Tom? Is it – did Broadcom spook the market? Did they start this? Is it positioning ahead of SpaceX and the biggest IPO we've ever seen? Is it – is it something else? What do you think? [00:38:33] Speaker 7: Scott, I think a lot of this – I mean, for instance, memory stocks are down, but they're back to where they were eight days ago. I think the market did have a parabolic lift in the last month. And now I think there's some sobering taking place because expectations are higher. But I also think that SpaceX – $75 billion is a lot to ask the public to fund. So I think it is a big lift in terms of how you're going to fund that purchase. And so I think now – when the stocks wobble a little bit, I think people are raising cash. I don't think that this is the start of a broader correction yet. But I – as you know, we do think that later this year there's going to be something that feels like a bear market. Today's not fun, though. [00:39:19] Speaker 1: But Spoke, Steph, put something out tongue-in-cheek, obviously, I think, on social media a little while ago that said, did the Knicks wreck the queues? $10,000 just to get in the door at MSG on Monday night. [00:39:34] Speaker 8: That's very funny. [00:39:35] Speaker 1: Got to raise capital from somewhere to afford those tickets at the highest part of the rafters over at MSG. But in all seriousness, like Michael Hartnett today, B of A, said the risks of a June swoon have been rising anyway. And that his – and, you know, his bull bear indicator numbers continue to rise the third week of sell signals. Mark Newton, who does technician work for – with Tom over at Fundstrat, says it's time to shift from growth to value. Is that what's happening now? Are these the earliest stages of a violent shift? [00:40:09] Speaker 8: Well, I think if you believe the economy is stronger than expected, which it is, and today's jobs report posted that, then you don't necessarily want to own long-duration assets, which technology is, as interest rates rise. And interest rates have been rising. Now, I'd say interest rates are rising for the right reason, because growth is better than expected. But also with that comes a little bit more inflation. It is definitely a rotation. You can see it today. You saw it yesterday. And I also think that there's opportunity, though, within tech. We'll get to that later. But what makes me bullish long-term is that what I just said about Meta spending so much, Google spending so much, and the four big players spending almost $800 billion this year on AI CapEx, and it going to $1.6 trillion next year, that is great for the food chain. That is great for the data center makers and the data center companies that put some of the stuff inside the data centers, and then also the grid and power. And so – and the backlogs we talked about, they're so amazing. So maybe we see a pullback. That's totally natural. But I think you want to make your shopping list for sure. I just don't necessarily want to own, in a broad way, the big four that are spending so much. [00:41:16] Speaker 1: Well, those big four, you know, firms have been speculating, Tom, and maybe you alluded to it already. The idea that the source of funds for SpaceX and whatever else is coming down the pike needs to be funded from somewhere. Now, there's a ton of money sitting in money markets. As John Waldron of Goldman Sachs pointed out on this very program some 48 or so hours ago. A lot of capital all over the world that wants a piece of these IPOs as well. Jeffries today says that the MAG-7 are the most likely source of funds as we look towards these big events. Do you buy that? [00:41:57] Speaker 7: I do. I mean, one of the things that's happening is, you know, the order book is being built for SpaceX. And as you know, institutions want to get a good allocation, so they're going to put in large orders, bigger than what they expect to get, because I'm sure we'll have a three times or ten times oversubscribed IPO. And so funds, I think, do want to raise some cash in case they do get a big allocation. I think that is correct that people are trying to raise some cash. And, of course, there's $7 trillion in cash on the sidelines, so, I mean, there still is a lot of firepower. But I think one of the things we have to keep in mind is that, you know, as SpaceX gets held and people own it, and then they start to think about Elon Musk is telling them about the future of data centers in space and power, I think it's actually going to be very good for SpaceX stock and this whole AI trade. So I think in some ways, I think there's a mechanical selling today, and it's not surprising, but I don't think that this is the start of a bigger correction yet. [00:42:58] Speaker 1: I don't know. I mean, it sounds a little, frankly, contradictory from you, only in the sense that you've been predicting a big swoon in the market to begin with. So why are you reticent now to suggest that this might be it, initiated by parabolic moves that are reversing in a more violent way? [00:43:22] Speaker 7: Yeah, Scott, I mean, part of it is when we looked at the largest IPOs in the U.S., the 10 largest since 1935, only AT&T wireless marked the top, and every other big IPO was actually mid-cycle, meaning markets didn't sell off on that. I think the bigger test will be when the lock-up expirations happen, which in SpaceX's case are phased over the next, you know, three to six months, depending on how it accelerates. And then, you know, later in the summer is when the market tests the new Fed, and the market has to deal with the shortages that are coming in petroleum products, et cetera. So I think that the cadence of news is still going to be good enough that, you know, the next couple weeks, markets should be fine. [00:44:07] Speaker 1: Yeah, Nasdaq's now down more than 4%. What has been, at least, you know, for most of the day, two-thirds of the trading day today, a primarily tech-led sell-off is obviously a little bit wider now when you have a, you know, the Dow's down 740. So, you know, you're getting to the point where you have a lot of the big names and market cap, the larger ones within the market that are down, you know, quite a bit. You've got a lot of the infrastructure plays around the AI story down, too. Let's bring in the Wharton School's Jeremy Siegel, Professor of Finance. It's good to add you to this conversation, Professor. What do you make of what you're watching? [00:44:48] Speaker 9: Well, Scott, you stole my thunder because one of the oldest sayings in Wall Street is up the staircase down the elevator. And that's exactly what happened when you have these super moves like we've seen in the chip stocks, the memory stocks, the trend followers, the momentum players, they're just on that. They have, you know, stops. Whenever it goes off the trend, they're out because they're just riding that train. And that's what you see today. Now, that's rarely the top. It could be the top, but usually it's a very short-term top, goes down and then tries to build up. And that's the point where you kind of look. Can it break the previous high? If it doesn't, then that could be a start of a more major downturn. But this is a very, very common reaction to what, as Tom said, we all saw the parabolic move. [00:45:41] Speaker 1: Yeah. I mean, some would look at the mere concentration around the, let's just say that the 10 most influential AI-related names, Professor, how much they've accounted for the S&P 500 gains. And you're in the 40% range. As, you know, Jeffrey Gunlock was sending me in earlier and I spoke about on halftime. When you start to get into the 40% concentration ballpark, you start retracing certain other periods of time that have had bubble-like activity. Not all of them have necessarily ended badly. And there's not yet evidence that this one will. A couple of days doesn't make anything other than a pullback, right? But I'm wondering what you'd make of that. The fact that we were just [00:46:33] Speaker 9: simply ripe for something like this. Well, I remember bubble proportions of the S&P 500 back in 1980 in energy, when we know what happened with OPEC who restricted the price and the, you know, the price of oil soared, you know, that disappeared quickly. And then, of course, the other one where technology went way up was, of course, the internet bubble of 1999-2000. Now, again, we all emphasize that this is a very different situation. And this AI revolution and the Mag-7 is a situation we just never have seen before on the cusp of potential technological changes and productivity growth that, you know, we may have to go back to the early stages of the industrial revolution to say. So, you know, when you go back two or three times and say, oh yeah, when something reaches 20, 25, 30%, that's a time to sell. There's many ways that you can say, well, we're in a different sort of period now. So I'm not going to say that this is over. I would like to say the following. You know, the argument is, oh, PEs haven't gone up on these chips because they double their earnings, they can double their price. Remember, you can only double your price if your earnings stay up doubled forever. If this is a three or four year burst and then they go back down, you way overplayed your hands here in these chip stocks. So, you know, that's what's happening. Be careful about temporary surges in profitability, which, you know, chips historically have cyclicality and saying, oh, hey, they're not any more expensive than they were six or eight months ago. [00:48:26] Speaker 1: So do you do you look at in any way announcements like we got from Alphabet this week about the equity offering and now a new report about the potential of Meta doing the same? Can you retrace that sort of behavior back to anything in prior cycles? When you go from, let's say, you know, you're spending a large portion of your free cash flow, it morphs into something else. Is that a worrisome signal or just the cost literally of doing business in what you yourself suggest is this technological revolution? [00:49:05] Speaker 9: Yeah, well, no, there is actually precedent here, Scott. And I wrote a chapter in my book, Future for Investors, called Capital Paves. And if you take a look at those firms that have spent the most on capital expansion, their returns risk adjusted have been the worst. So, you know, that it's not usually a good sign that you've got to spend a lot on capital, not always bad. And we know about data centers, we know about that particular demand. But yeah, the capital spending factor in all historical, you know, U.S. data research on Fama France and the research of security pricing has shown that that has a negative factor in terms of future returns. So, I understand Stephanie saying, "Hey, I'm stepping back here." And yes, there is history [00:50:04] Speaker 1: that that's not a good omen. Professor, stay with me. We're obviously looking ahead to the big event one week from today being SpaceX. Professor, I'll come back to you. You've seen a lot of IPOs, obviously. You've never seen one this big. How are you thinking about it? What the impact could be as all of that demand, excuse me, all of that supply comes on the market? [00:50:27] Speaker 9: Yeah, Scott, and you know, I don't think it's a particularly good idea for these brokerage firms to restrict these investors that get these allocations two weeks into selling because that's just going to make the supply that much less when that trade opens. You know, so, you know, instead of 135, if they restrict people from supplying that at that open, then it might open at 235 or 300, and that's going to be a disappointment to all those people that want to participate into that. I mean, my feeling is try to get as many people that want to, you know, supply this unbelievable demand as you can to balance the market. [00:51:10] Speaker 1: Tom, your final thought, and by the way, I should ask you too, Tom, I mean, crypto is getting destroyed. Bitcoin, I mean, you have, you know, pins on your jacket. I think you're wearing one. I usually see them when you're sitting here next to me on Ethereum and what you've had going on with BitMine. [00:51:29] Speaker 7: This is ugly, to say the least. Oh, yeah, Scott, it's ugly because, you know, in the last few months, AI stocks have been doing well and crypto stocks have lagged. And then now we are seeing a, you know, a big correction in tech stocks and now crypto stock, crypto prices and crypto stocks are getting hit. So I think it's very disappointing. But to me, part of this has to do with, you know, the supply that we are talking about, that there's a lot of IPOs and there's a lot of capital being raised. And I think that's putting pressure on the stocks. And then there have been some, you know, headlines around AI trying to do exploits around crypto projects. And so I think investors are nervous. But to me, the driver for the future of demand for crypto remains Wall Street tokenizing assets. There still is no other way to decentralize those assets. The second is in the future, there's going to be a lot of demand for managing and identifying AI agents, as you know, this machine to machine economy takes off. That won't run on centralized rails. It's going to run on crypto rails. So I think the story is still very strong, but in the near term, it's been very ugly, as you point out. Yeah, that's for [00:52:46] Speaker 1: certain. I mean, I think some are doubting at least a good part of the positive story that you and others have been telling the price action. Don't lie. You got about two minutes to take us towards this close and it's going to be an ugly one. We know that. What do you make of it? Look, we can't have markets go up [00:53:03] Speaker 10: every single day as nice as that would be. So I see the correction today as a really healthy part of the market. We have a number of names that had done absolutely extraordinary despite a fair amount of headwinds, right? Like conflict overseas. So what we're seeing today is that some of those expectations had gotten a little bit ahead of themselves. Also, a lot of money had come in off onto these names. So I think it's healthy that people are looking to take a pause here. [00:53:29] Speaker 1: Do you think it's the start of something bigger, at least in terms of the rotation out of tech [00:53:33] Speaker 10: and potentially into other areas? Yeah. And we think, I mean, this is the playbook that we've had for a while where, yes, AI and technology is incredibly important, but eventually those benefits start to migrate to other areas of the economy. That means, you know, going down cap, going to other sectors. We think this is a trend that will continue over some time. That doesn't mean that other names are going to plummet. It just means others are going to benefit as well. [00:53:57] Speaker 1: What about the dip buyers? Where are they? When do they come in? Where do they still say, you know what? We're big believers in the AI story. Alphabet and Meta don't go to market if they're not still big believers in this story. So why shouldn't we be? [00:54:13] Speaker 10: Well, think about it. We've had $800 billion of new money coming in from the retail side into ETFs today. That's on pace to be one of the best years ever. So there is still money coming in. Now, the thing to remember though, some of those names that you mentioned need to come to market in a way that they haven't in the past, right? This CapEx needs to be funded in some way. So you're right. In order for them to fulfill their CapEx dreams, they're going to rely on this incremental dollar coming in. So it's important that they continue to tell that story and bring [00:54:42] Speaker 1: new money in. All right. You have a good weekend, Kara. We'll talk to you soon. I'm certain of that. Not much to cheer about, let's be honest. That's the way it goes here though. The opens and the closes, no matter what the market does. And today is decidedly bad. Chip stocks really leading tech to a nasty day, the worst in more than a year for the NASDAQ. Hello everybody. Welcome to Blue Cloud [00:55:04] Speaker 11: Trading. I'm George. In this video, we're going to cover the stocks and ETFs. Not all of them, but a good portion of the stocks that were discussed on today's episode of the halftime report, closing and closing bell. We saw Tom Lee. We saw Jeremy Siegel. We saw, I mean, we saw how the market performed. It wasn't pretty. The Dow Jones was actually down 1.35%. Look at the NASDAQ down 4.18% by the end of the day. S&P 500 down 2.64% and the Russell 2000 down 3.55%. You can see it. It basically started in the morning here. Just continue to drop throughout the day in all of these indices. And if we take a look at the heat map, this is what it looked like at the close guys. So Nvidia, Brock, all the semiconductors really took a big hit. Look at AMD down 10.86%. Intel down 11.28%. Qcom down 10.98%. Oracle was down 9.59%. Basically, the software infrastructure stocks were down. Apple was down 1.25%. Yeah, some big numbers there. Obviously, there was a shift taking place here. I think money is going to be coming out potentially out of the technology stocks for a short time. It could be short-lived, but it could also be a more extended pullback for technology. We're going to look at the charts in a few seconds though. And when we start looking at those technicals in a few seconds, like I said, guys, I think that there is still a little bit of room for hope based on what I'm seeing on the charts. So let's also, so how did some of the other sectors do today? Well, look at healthcare, for example. They were, it was all, the majority of the stocks here were up, like Johnson & Johnson was up 2.02. Pfizer was up 1.36. Amgen was up. Eli Lilly, Mark, Bristol Myers. I mean, these are sectors that have been beaten down for so long. Utilities were up today. The real estate stocks, the majority of them did well. Consumer defensive stocks like Coca-Cola and Procter. Look at Procter Gamble up 4.09%. So we are seeing potentially a move into some of these other areas. Under insurance, you can see some of the companies that did well here. Let me just highlight that so you can see the percentages. You know, one other thing I just noticed here is how, you know, energy stocks, for example, the majority of those were down today. And if I take a look here at the after hours performance, what's going on after market. It was at 6:50 PM. You can see Apple is up after the close, 0.26. Micron is up 0.65%. Tesla is up 0.41%. So I don't know, you know, and the energy stocks seem to be moving quite a bit actually, which is interesting. So we'll see what happens, I guess, on Monday. I'll be doing a very thorough analysis of the sectors and industries this weekend. All right, so you may want to consider becoming a member if you want to get access to those videos. They're called the member-only videos that I do each weekend. I did one here last week, the week before, the week before that. And they're usually over an hour long. And I go over the entire portfolio and give new stock ideas. I create a new watch list, a stock watch list, and ETF watch list. And I share those with members. All right, Blue Cloud Trader and Blue Cloud Legend level members. To get access to those videos, click the join button here. Select Blue Cloud Trader to get access to that video. If you want to get daily updates on the trades, become a Blue Cloud Legend level member. I closed out of a whole bunch of positions today. Today was profit-taking day, in my opinion. Today was the day to, you start seeing the market dropping precipitously and not slowing down and the whole market collectively is moving down. It's time to take some profits. So I had a lot of trades and some very profitable trades that I closed out of during the day. And I shared that with Legend level members. So that's one of the things you may want to consider is upgrade to the next level if you want to get those daily trades. All right, and I do that, of course, I share that before the market closes with Legend level members. Guys, let's get back to the charts here for a moment now. So we're going to look at the SPY. Here's the S&P 500 today. So it's a huge drop. We're using the Ichimoku indicator. Price broke through today. It looked like it was going to actually bounce yesterday. I mean, price had stalled at the nine period and got, you know, the bulls pushed it up. This morning, price gapped down. That's always a bad sign, right? When you see price gapping to the downside, opening up and then dropping also under a support level like the 749.53, for example, 1049, which is based on this prior high, that's not a good sign. Also getting under the Tenkinson, which is the nine period, the midpoint to the last nine periods. All of that happened today, down 2.6%. High volume. Look at the directional movement index. It was, you know, it was just moving sideways here before. And the green line was above the red line. But you can see that we actually kind of got a little bit of a heads up with the directional movement index indicator here that something might potentially happen. We started seeing that right here, basically on this candle here. So it would have been based on that because the price actually gapped down and dropped and it made the red line move up. That's the negative DI nine. Positive DI was dropping too. And it just continued to do that. And then today we had the crossover. That's not a good sign. Now, the good news is the ADX is not moving up yet. If this starts moving up while the red line is above the green line, that is the danger zone. Here's some other positive news. Here's some, here's a silver lining that I can share with you. This red line that you see here, which is the midpoint of the last 26 periods. That tends to be the next level of support. And many times price comes right here. And a lot of buy, a lot of traders see this as a buying opportunity. And so it could potentially on Monday start to bounce off that red line and then move back up again. All right. This may be a very short lived drop. We had a drop over here too. This one was a little bit more pronounced because it happened with higher volume, right? And what happens is it's like a stampede. Everybody wants to get out. And it makes sense if you have, if you've been, you know, making some profitable, if you've been like locked in on, on many trades that have moved up quite a bit, you do want to take those, those profits. Why? Because we don't know what exactly is going to happen. This could potentially drop further, right? But it did at least, I will say this, it stopped. It stalled right at the Kegensen. And by the way, it wasn't just a SPY. Let's take a look at the QQQ ETF. All right. You see this dropped through that 722.03 level, which was a prior level of support, but it stalled again, right on that red line, which is the baseline or Kegensen. This is the faster moving average. This is the slower one. So, you know, yeah, we see the negative, negativity here too, the negative crossover that occurred right there. But the ADX is still dropping and the volume was also significantly higher as price, you know, as, as people just started closing out of their positions. How about the Dow Jones? DIA ETF. This one also closed for the first time under the Tengensen. Bearish engulfing pattern. That's not a good sign right there. This one is more likely to pull back even further because it did not even come down to the support level yet. So the Dow is actually looking slightly, you know, a little bit stronger than the other indices. It's going to be a little bit more protected. As you can see, down 1.36% versus down 4.8 for the Qs. So if you're looking for less volatility, this is probably the place to be. The beta is 0.84. What about the Russell IWM, which has a higher beta, but it also drops significantly lower once, as you can see, we were finding support at these, at these levels here, right? We were building a base, you know, ultimately what you're, what you're hoping for is that price is going to break through those highs. It didn't happen. Price gapped down and continued down. But what happened was it found support right there at the red line, the 26 period. In this case, it actually, when we had the pullback right over here, okay, you can see to get underneath the red line for just one day, creating a spinning top, finding support at this prior low here of 270.36. And by the way, this, this wig that you see right here, this represents a little bit of buying that happened towards the end of the day. And it happened on all of these indices. This is a small little wick right there. On the queues, no, there was not. The Dow Jones, a small little wick. Russell, same thing. We switch it to, say, a three-minute chart, and you can see just that little, right around this time, around 3:20 PM is when some money started coming into it, into the Russell. All right? After that big drop on the three-minute chart. So we'll see if that can materialize into something more. The VIX, folks, this is the volatility index, the fear index that we keep talking about. And as long as price, I'm sorry, as long as the level of VIX is, you know, around these levels where it was before, which is between usually around 16 or 15 to 16, that level. That's a very conducive to a bullish market. But once it starts to spike, like it did today, 31.04%, it went, it literally jumped 35.4% in one day, you know, like from this point right here, where it opened, it moved up that much. So the VIX is, yeah, it's, if it does, if it continues to be up, moving up, if there's more fear that comes in the market, if more people decide that they're going to take more profits on Monday, well, we can see a little, the pullback drop some more, or the markets drop a little more. FEZ, the Eurostox 50, also dropped today down 2.25%, but still above that 26 period. Right? You start looking, by the way, really important to also, we're looking at a daily chart, and this is a lot, it's going to be, you're going to see the yo-yo effect on daily charts, but what we need to do is also focus on the weekly. Let's look at that weekly chart, and let's look at the SPY. I mean, you can't have this many candles moving up without seeing a little bit of a pullback on the weekly chart. It's finally happening. It dropped under, like I said. So could it potentially drop some more? Yeah. Just to reach down to this green line, the next nine period, the next level of support, it's about another 4% potentially that it could drop. Just to reach that on the weekly chart. The Qs, all right, it would basically are around 6% away from their support level right there. The Dow, you know, it's actually still above the 505.30, so I wouldn't worry about the Dow right now. IWM is probably, it could potentially drop another 3.8% before finding support at 270. All right, and the FEZ, like I said before, this one was stalling on the monthly level of 69.44. Here's a monthly chart on the Eurostox 50. We came to that high back on February 27th and pulled back, and now we retested and we still haven't surpassed the 69.44. So again, weekly chart and there's the daily dropping. But overall, are we still in an uptrend here? Yeah, we are basically. We've got higher highs, higher lows, but we did have a down day and it could potentially lead to more down days, like I said before. GLD also got dropped 3.63%, which was interesting because you would think that money might start coming into gold. And in fact, you know, as far as an inflow of money into GLD, if we look at the, let me just go ahead and look at the post market here, it did move up slightly after hours. So we might see GLD potentially reverse course too, but whenever price gets under the 200, it gets under the 399.20, you have to have, expect the worst, right? Silver on the other hand, which dropped 8.08% is now coming to a level of support. So you can see it's coming to the 60.37, these prior lows here, and it's also coming close to the 200-day moving average, which has been rising. It's that dotted yellow line that you see right there. So silver, even though it looks pretty bearish here with the directional movement index, the volume spiking as well, and the percentage drop that we saw, you know, there may be some people that see that as a buying opportunity once it gets to this level. Would I be adding positions right here? No. But I'm just saying, that's my thinking, and I wouldn't be shorting silver. Let's put it that way. Oil K, gold on the other hand, is a different story, but that one looks a little bit weaker because it broke through levels of support. But silver still looks relatively strong, even though it dropped 8.08%, which was significantly more than gold. Oil K, this is the ProShares K1 free crude oil strategy ETF. It dropped 1.41%, but look where it stalled, right at the cloud, which is the level of support. And in fact, it has not taken out these lows here. So oil K, the crude oil, is still in my opinion, but it's just wavering here, and it's consolidating, and it's just waiting, I think, for us to get more information about what's going to happen in the straight of Hormuz. Once that's cleared, you know, we'll see how this specific ETF reacts. It should move up if the straight opens, obviously. Bitcoin, look at this, dropped through that support level. I drew this 35.30 level. Let's see. Originally created, yeah, on June 3rd, I was looking at this prior low here, 35.30, which was February of 2026, February 5th. We came to it here. We dropped through it today. That's not good for Bitcoin. Ethereum, I mentioned how that was looking bearish yesterday. If you guys checked out my video from yesterday, it wasn't good that it got under the 17.07 level, that prior level of support, dropped under right there, that little candle, and then boom, gapped and continued to the downside. And the directional movement index tells you the story right here, too. Red line moving up, green line is moving down, ADX is moving up. It's not a surprise. COPX. Here's a surprise, though. Copper Miner CTF. Also, here's a weekly chart. And we've been following this for a little while because it's been stuck in the symmetrical triangle. And I mentioned how we should wait until Friday, until the end of Friday to know where this might be heading potentially, right? Because there was a little bit of a pop, a fake little move here with that wick that you see right there above that trend line, the symmetrical triangle. And then price dropped. That happened on this day right here, back on Tuesday, June 2nd. Then we had Wednesday, Thursday, and then Friday gapped down and dropped under, under that symmetrical triangle, okay? So we are under. It's more likely to pull back, actually, further, based on what I'm seeing here. So we'll see if I'm correct about that now that it broke through the triangle. It showed us its true colors, essentially, of what the clear, what the direction is going to be. Anything can happen in the market. And I'm just saying, this is more a probability type situation when you start seeing a symmetrical triangle that's broken on one of the angles. If it's the downward trend line and it breaks above, that's bullish. Of course, if it's a rising and it gets under, that's bearish. MAGS, the mags, check this out, folks. Let's check this out. Double, if you look at the daily chart here, double top pattern, all right? We've talked about that pattern quite a bit. If we go here for a moment, let's go to my X page, @BlueCloudTrader, scroll down, click on highlights, scroll down some more, and we find the candle pattern reference sheet. I'm sorry, not this one. We want to look at the pattern cheat sheet right here. And I'm going to show you guys the double top pattern here, which is bearish. There it is. Okay. It's this one. So price has been moving up, reaches a level. Okay. Reaches that level right there. Number one, drops, comes back to that same exact level and drops some more. Now, if it breaks through this low, that's when things get hairy and very bearish. And that, my friends, is what has occurred here with the MAGS 7 on the daily chart at least. So I'll show you guys what I'm talking about. We'll move these down a little bit. Let's make this chart a little bigger. There we go. All right. So there's price. It's been moving up, dropped, came down to this level, right? Moves back up, hits this the same exact level, drops. Instead of finding support here, which it did for a couple of days at least, on Friday, it dropped right through it easily, right? Like butter. It went right through. So my expectation, I think that we're going to see this pull back some more. And on the daily chart, let me just check the weekly as well real quick. Yeah. It's got some, some room to run before it hits support and maybe another 3.8% or so on the weekly. And on the daily chart, we're about 2.7% away from the 200. So wouldn't be shocked to see this drop a little bit more. SMH, huge drop, 9.22%. This is one of the ETFs we've been following for a while, right? Price has been moving up. It's been steady. We had a little scare here where price got on the Tegenson, the green line for literally just two days and then continue to the upside. Here we are again. We're onto the green line. We stalled at the red line, which is the baseline, the 26th period. What's going to happen on Monday? I have no clue. We're going to find out, aren't we? So we have to pay attention more than ever here. And I think that, you know, hedging is not a bad idea on Monday. If you start seeing that, we're going to see a continuation to the downside, especially if it says pronounced as we saw it today. There's a lot of volume. But if we see a gap up in the morning, which is also possible because, you know, what's going to happen is there's going to be a lot of, I think, investors and traders are going to be looking at these technicals. They're going to be looking at what transpired on Friday. They're going to be thinking, is this the pullback? Is this the buy the dip spot? Is this the correct place to get in again? Or is this market significantly weaker than we thought it was, and it's time to bail on the technology stocks? You know, in my opinion, to see that happen, you got to say, we need a continuation. We need to see at least two, three more candles, at least two, three more days of that type of selling. This is not a pretty candle here on the weekly chart for SMH. It's a shooting star. So we talked about that one too. Here, scroll back up here to the candle pattern reference sheet. You look right here. This is the shooting star. Okay. Single candle pattern. After price has been moving, you see this long wick, small little red body, which starts dropping under the low, which by the way, hasn't happened yet. And so that's why I think we have to give it an opportunity here. So on Monday, we start seeing price getting under the low of this candle. I think we're going to certainly see it continue to the downside and try to test those levels. There are many times when a reversal candle like this forms and then it's canceled out because we get a gap up and then the continuation. All right. The market's weird. Let's call it what it is. There's no... So we basically just need to observe it and then react to it each time that we see something. Uh, and if it seems like a substantial situation, you want to protect yourself by taking profits in your profitable trades and manage the rest of your portfolio. And that's what I do. And I share my thoughts about how I do it in those member only videos. All right. Let's take a look at the stocks, not all of them, but a good portion of the stocks that were discussed on today's episode of the halftime report and closing bell. So DVY is the only ETF and only symbol here that actually today got a blue flag. The blue flag represents, um, a stock or ETF that is basically the prices above the moving averages here above the Ichimoku cloud. Um, we get the Chiku span above price. All right. That's very bullish. That's the weekly. There's the daily same situation here. Prices above the Ichimoku cloud, prices above the two moving averages here and Chiku span, which is the current price projected 26 periods ago is above the candle 26 periods ago. So those are the elements of this indicator. Uh, I went a little bit more in detail about it in yesterday's video. So check that out. But basically, yeah, this is a safe, a safer place to be, you know, dividend stocks that just in case, right? So I think that's why it was a 0.32%, but don't expect huge returns on something like this because it doesn't really move much. The beta is just 0.6%, right? Um, so yeah, I mean, from this point here back in 2025, if you look all the way back here, November 24th of 2025, it's only moved up 9.7% since that point. All right. Um, how about Broadcom AVGO? Remember, we talked about this yesterday, actually, I said, guys, this was a forewarning, right? We had the hanging man pattern. That's when you get a red candle like this with a wick on the bottom. We had the bearish engulfing pattern. It dropped a gap down. It, you know, we, we create a bullish candle, but, um, price gap down again and continue to the downside. And now I've found another level of support, the cloud itself. So might this be the next buying point? Might this be the end of this pullback and, uh, potential, um, entry on Monday? I, I personally wouldn't be adding until I see more confirmation, but you know, again, price, this, this particular chart is, uh, you can see the volatility there. It's pretty interesting. Um, and then let's look at, actually, let's look at this one on the weekly chart too. So it's pulled back, um, on Thursday, it was still above the moving averages on the weekly. Today, as you can see, it's under, but it's still above the cloud. What about Intel on the weekly chart pulled back still above the moving averages still above the Ichimoku cloud, right? It's, um, it almost looks like a pat like a pennant pattern in my opinion. All right. Which is actually a bullish pattern on the weekly, but the daily chart is giving us another situation. It's telling us it's a, it's a descending, descending pattern. I mean, it's when you start seeing a lower high here like this and we get a break under a, a horizontal trend line. That's called the descending triangle. Okay. So let me show you that one too. It's under the pattern cheat sheet. Let's go right here. There it is. Okay. And so that is not good, not good for Intel. So it may pull back some more. Um, we'll see what happens, I guess. Right. XLK down negative 6.66. Is that an omen? Possibly technology dropping so much on the daily chart coming close to the key. Jensen, the 26 period. It's basically just about 1.1% away from that level. Uh, and here's the weekly chart, a bearish engulfing pattern. That's also on our cheat sheet on the, on the, um, candlesticks. Right here. There's the small candle. There's a larger red candle that engulfs it. That's called the bearish engulfing. It's a double candle pattern and it's bearish. All right. You can get these guys. You can, you can get these and download these, uh, these two cheat sheets here on my X page. It's Apple Cloud Trader. Okay. You'll also find the link on my page on my YouTube channel. Um, let's keep going. So XLK, it does look like it's next week could be potentially, uh, bearish, but again, we won't know until Monday. And a lot of things can happen over the weekend. Here's MSTR, the micro strategy. They talked about this stock for, for a little bit. This one seems like it might've found a bottom potentially. Just go ahead and throw in the, uh, in fact, I'll do a weekly level here. You can see that on the weekly chart. Let's see that low right there is 116.40. I do like to color the weekly levels blue so that they're easier to identify. Here's some more levels back here, the 101 level. If it gets under that 116.40, expect it to drop to 101. But right now it seems to be stalling at least here down 6.9%. It was a big drop. Um, Cisco. Ooh, I don't like that candle. It's a shooting star, very bearish on the weekly chart and on the daily chart. It just got under the tangents. And after this nice move up. So this is obviously a sign time to consider taking profits. All right. If you've been in this, don't be adding positions here is my, is my point. It doesn't make sense. XLF. You don't buy into weakness. Uh, Stephanie links. That's Stephanie links, uh, protocol. That's her strategy. No, you don't average down. That's a bad idea because you don't know how long that trend is going to last. You wait until a little money starts coming back into it. More interest, right? More demand. Uh, that's going to help push it back to higher levels. Um, but that's her strategy. Everyone has different strategies. I mean, uh, XLF is above the Ichimoku cloud here. Popped a little bit today. It was up 0.19% on the daily chart, but it stalled right at the 200. And here's the weekly chart inside the cloud. So there's nothing to do here quite yet, but XLF could potentially next week start to, um, if, if we start seeing a sector rotation, we might see it also coming to XLF. Visa, um, up 1.10%. We got a nice little hammer candle here, but, um, I don't know. It's still under the cloud. You just skip it, right? That's a bearish chart that we're looking at. We've got a series of lower highs here. Uh, American Express inside the Ichimoku cloud. That means you shouldn't be adding positions here. All right. It's just stuck. It's down 0.6%. No on that one. Coca-Cola. Uh, this one here looks more bullish here today on the daily. This is a week. I'm sorry. This is a weekly chart that we're looking at. This looks pretty bullish on the weekly. Let's take a look at the daily chart though. Okay. So it is technically above the cloud, but the moving averages are right above it. It has closed under them. Okay. So you want to wait for that breakout. You will also want to potentially wait for the moving averages to get in the correct order. Right now they're the faster moving average just crossed onto the slower one. So the green line is under the red line. That's bearish. Otherwise Coca-Cola might start to make sense soon, especially if it can break through that $82 level. It's based on this prior high here from February 27th. Notice what happened in the most recent history price came to that $82 level back here. Um, on this date, let's find out. That was on May 19th. It was, um, it pierced it and then dropped and closed underneath. It pierced it again on May 20th and dropped and closed under. Never made it these next few days. Uh, it pierced that again on May 27th and then closed under it. So you can see that's a very significant level, right? Think of that as a long-term weekly double top pattern. All right. That's started. That's kind of forming. Uh, and if we get into these lows, then we're in trouble with Coca-Cola, but right now it is holding up. We'll see if this can, you know, continue to the upside. FISV, Fiserv. Oh boy, down 3.21%. Um, do you see how it doesn't make sense? If, let's assume that Stephanie Link was into this specific stock, Fiserv. She said the profit margins were positive. The fundamentals of global sales growth is, uh, 7%. Okay. The price of sales is pretty attractive at 1.4. The peg ratio is three. I mean, it's a little on the higher, slightly higher than you want. Operating cashflow is 6 billion positive. Okay. All these positive things, uh, if it does $1.8 billion next, you know, the next earnings are on July 22nd. So, but let's assume that just based on the fundamentals, she's like, Oh, you know what? It's gotten cheaper. I'm going to buy it here. I'm going to buy it here. I'm going to buy it here. Oh, it keeps on getting cheaper and cheaper and cheaper. Now years go by. Okay. We're from 2025. All right. All the way down to this point. You know how that drop is a cent is basically about 77%, 77.3%. And it doesn't look like it's slowing down. It's still dropping. And, and guess what? If you look at the weekly chart, the directional movement index is telling you to stay out this whole time. And if you just listen to the charts, you'll have a higher success ratio because you can put your money in it when it makes sense. Like when it breaks through the Ichimoku cloud and you can see the demand here, right? Because all stocks, they go through stages, the accumulation stage. That's when you want to get in. Well, actually, this is the accumulation stage. And then this is the markup stage right here. All right. So we want to, we want to personally, I like to get into it when price breaks through the Ichimoku cloud and all the elements of the Ichimoku are bullish on both the weekly and the daily chart. Here on the weekly chart, you can see this thing is still dropping. Here's the daily chart. Okay. Still dropping. So stay out of that one. XLB broke through the Ichimoku cloud, but is this a strong candle? No, it's a shooting star. It's a reversal candle. And although it was up 0.61%, I wouldn't be adding positions here. Then I also remember this, this just applies to the daily chart right now, which in the volume that has been more positive and the directional movement index looks more bullish here with the green line above the red line. But you look at the weekly chart, and the Tenkinson here, the faster moving average is still under the slower one. And the lagging line here, the Chikuspag, as they call it, which is the current price projected 26 periods ago, that white line is still under the candle. So that's also bearish. So we got two things that are bearish with Ichimoku on XLV. But with that said, that's just the ETF. There might be stocks within XLV that are doing really well. Like if you can open up that component watch list and select the percentage change here, and we can see some of the stocks that did really well today, like COO, for example, which is Cooper Company, Cooper Companies, right? That was a huge move. Now on the weekly chart, but it's still under the cloud. And if you look at the daily chart, look at that big gap up. So it created a double bottom here. It might be the beginning stages. Would I want to jump in here? I think it's still a little bit too early, honestly. We're still under that 200-day moving average. But some people, if you want to trade this on another time frame, maybe like a four hour, it makes sense. And you just focus on that four hour time frame. Check on that stock every four hours, if you've got the time to do it. I personally don't have the time to just like look every four hours and try to time, you know, observing these things. I'm either observing the markets, you know, but I don't want to be basically married to the stocks and just like, you know, following them 24/7. You need to create alerts. You can also create alerts though too. And you can do that very easily. Here's another one, PODD, that's moved up a little bit. CI. Let's see if we can find one that's above the cloud. Any? Yeah, here's one. DGX, Quest Diagnostics Inc. Okay. On the four hour time frame. On the daily, it still hasn't really taken off yet. Johnson & Johnson was up 2.02%, right? You can see right here, it stalled at the cloud. So I wouldn't be adding position here on Johnson & Johnson. All right. Let's take a look at AbbVie, which popped up 1.03%, but also created a reversal candle here on the daily chart. And so that, again, I personally wouldn't add a position based on that. On the weekly chart, it's also broken through the cloud, but the ChicoSpan is just right on that candle. Faster moving average is under slow. I'd skip that one. SBRA dropped on the weekly chart here during the week, but today was up 4.47%. It's a real estate sector REIT in the healthcare facilities. You get a bullish engulfing pattern. That's when you have a smaller red candle, like you see right here, followed by a larger bullish candle that engulfs it. Higher probability that this is going to move up. Again, wouldn't be adding it because we're still under these resistance levels, which are very close. UNH popped. This one looks a little more interesting on the daily chart because it's above the moving averages. But the moving averages, yeah, let's see here. It looks good on the daily. There's going to be some resistance on the daily chart at the high here, which is 404.15. And you can see it touched it and dropped a little bit. So it created a reversal candle. If you can get above 404.15, that might be interesting. And let's look at the weekly though. Oh, okay. So I take that back. I'd stay out of this because it's not, you're not getting confluence on both timeframes. Again, daily chart looks great. The weekly needs a lot of work, but at least the weekly chart, you know, price has been moving up all these weeks. All right. We're breaking, we broke through this level here, the 381. Now we've got this 404.15 level. We've got a higher low here in the weekly, all right, from the prior week. And we've got a higher high here. Meta does not look good. It was down 5.51%. It hasn't looked good for a while. It's just been stagnant, stuck in this consolidation area. And it's not a good sign when we're under the cloud on the weekly chart. You really have to be cautious. And here's the daily chart, also under the cloud on the daily. Wow. We went through a lot, folks. That's going to do it for this video. Thank you for watching. Thank you for supporting this channel. All right. Hit the like button. Hit the subscribe button. Have a great weekend. And consider, consider becoming a member so that you can get access to the member-only videos that I produce, right? Again, you can do that by hitting the join button. Free to subscribe. Help me reach 30,000 subscribers. We're getting closer and closer. Let's get it done. And I'll do something special when we hit that 30k. All right. Guys, have a good one. I'll catch you all in the next video. [01:33:32] Speaker 7: The Ichimoku is guiding light. Blue cloud trading through the night. [01:33:46] Speaker ?: The Ichimoku is guiding light. Blue cloud trading through the night. The Ichimoku is guiding light. Blue cloud trading through the night. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video. And I'll catch you all in the next video.