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Hello and welcome back to Stock Market Weekly. I'm your host, Evan Medeiros. This is the show that breaks down the notable moves across financial markets through the lens of technical analysis, and we do it in 20 minutes or less every single week. Thanks for being here. Thanks for joining on this summertime weekend.
I'm off camera today, but we got plenty to talk about. It was an eventful week to say the least. So, let's get right into it here. First off, our sponsor, IBD Investors Business Daily. We've got links in the description of this show. You can check out as soon as you're done watching to their Market Surge and their IBD digital subscription.
Get you introductory savings on both of those platforms. Check it out once you're done in this episode. Now, I'm going to take a little bit of a roundabout way on talking about this week's action. So, kind of coming into this week, we were seeing weakness across the board. We were starting to see some of the defensive areas of the market.
Let's get my drawing tools on here. Consumer staples XLP starting to firm up in this nice tight orderly base. We had this nice higher low and it was looking prime to move here throughout this week. And then we got hit with Target earnings. Target reported earnings this week. Now, Target's been in a bit of a doghouse here for quite some time for a variety of reasons, but certainly no help after reporting earnings.
We had this gap down and then some kind of penalty box trading and then we hit Walmart right after the very next day. So, Walmart uh misses EPS as well. It did raise the outlook uh for the full year uh ongoing but still the stock kind of penalized here and consumer staples defensive area of the market kind of uh left without that strong breakout.
Meanwhile on the other side of the risk spectrum we had semiconductors and semiconductors here I posted this chart on X earlier. This is market surge basically highlighting the fact that they were starting to roll over. they were starting to fall back down towards these 2024 highs here. And I sort of put out the uh you know line in the sand so to speak that this week's close would be important for SMH to stay above those 2024 area the levels and all the while we had the S&P 500 selling off basically incrementally here.
This was last Friday, Monday, Tuesday, Wednesday, Thursday into Jackson Hole where we got the soontobe famous Powell pivot coming to the rescue, saving this market that was on edge, on jitters, a little bit worried, maybe overextended, and Jerome Powell kind of came in here and swept away all of the concerns.
The Fed now citing concerns over slowing economic growth, citing potential labor market weakness and really the big kind of uh shift here was returning to a flexible sort of forward-looking inflation targeting model, right? Kind of leaving behind the wait and see, waiting for data 2% wait, right? looking now at a more flexible forwardlooking model and the market loved it.
Now, of course, this is summertime trading, so things move quickly. It takes less dollars to move these markets around and we were just coming off of a 4day kind of selloff here, but markets responded in kind here. This is the Russell 2000. Here we go. Breaking out and doing it on some pretty heavy volume given the seasonality that we find ourselves in.
This was the intraweek slide here. We had this nice higher low and then off to the races. Small caps leading for the second week in a row. This is small caps relative to the S&P 500. I know this is hard to see. This is looking back over the past 5 years, but this is essentially plotting the daily uh relative returns here.
And you can see today was a very meaningful day over two standard standard deviation uh surge here in the Russell relative to the SPY. And just to give some more kind of color here to the Russell 2000, this is the year-to- date performance of the SPY versus the Russell 2000. And you can see the Russell is still lagging.
It's up only, you know, less than 7% this year. But it is catching up quick here. And so this rotation into small caps, which we identified last week, is getting some legs here. Right? This is a second now week of follow-through and some outperformance. So, there's something a little more durable and sticky behind this rotation.
Meanwhile, you've got the old boring Dow Jones breaking out to new highs. Great looking pattern here as well. You kind of have uh just a big, you know, kind of serious base and and uh accumulation here that's been put in since late 2024, breaking out here on heavy volume this Friday. international stocks, international stocks, we've talked about it multiple times throughout this uh year, but you can see that uh ACWX, so I'm just using this as a proxy here for international stock markets outside of the United States.
That's the blue line you see on this chart. And you can see they're up 24% almost 24% year to date in the face of SPY up 11%. So once again, you're getting some stickiness here. And this is even despite all this strong arm rhetoric of uh tariffs that are, you know, uh kind of plaguing the world now, but they seem to be doing just fine outside of the United States.
So, uh good run here in international stocks continuing. And here's gold miners. We were broken record about gold and gold miners throughout this base back here. And now you can see they're making again a second kind of push up. You had this small little consolidation above this base here making highs.
So really all is to say life was pretty good this week. If you could make it till Friday, if you didn't get stopped out, reduce risk, uh the anxiety that um went into perhaps Jackson Hole in the end of the week, then you certainly came out the week feeling a lot better. Here was the total scoreboard on the weekly return.
Small caps again uh top of the list here 3.4% for the second week in a row. Dow Jones took the second spot. SPY was a little over uh just just barely green, but again good recovery after its 4-day sell-off. NASDAQ 100 couldn't quite get green. Still finished down 1%. This is the uh Vshape here of the SPY action into the close of the week.
And here's the price action of the SPY just kind of over the summertime trading since the end of June. This is what things kind of look like here. Friday was again the big spike and this technical picture still looks pretty strong. One of the themes that we've been trying to kind of illustrate here over the past few weeks while lots of people are getting bearish and uncertain on this market for very logical reasons.
I think the hardest action is to remain in this market is to stay long this market. I think that is the pain trade right now and it is hard to do because there are risks out there but these trends are still holding up. Yes, we are getting these brief periods of uh you know uh selling pressure and yes there are individual stocks that are that got hit much harder than what this spy chart shows.
I mean if you go out to some of the tech stocks or even some of the crypto stocks they were down you know double-digit percentages are still in declines but as a whole in the aggregate mag seven stocks market cap weighted stocks and now some small cap stocks are still keeping things alive here. So I think right now kind of looking ahead from the technical perspective I think you've got a new higher low that you can use which is approximately this week's lows Thursday's lows and if we're staying above Thursday's lows then if you're a tactive tactical active trader then again I think you just got to stay long this market you got to try and keep a foot in the door before it gets away from you.
uh if we start breaking below f this this Thursday's lows then you know there's some risk management you could take and then the big level which I you know we talked about the last um last time is this 620 area. I think this is going to be the bigger intermediate term shelf here and maybe we stay rangebound for the next few weeks.
I mean seasonality is not our friend right now. This is a weak period in the market uh generally speaking and so you know maybe this is kind of a fake out here. we try and push up, we fail early next week, we come back down and we chop it out. I think again that would be, you know, generally speaking kind of healthy as some rotation happens and some consolidation happens.
But, you know, the case for just being outright bearish here is is a little bit tough to see if you're really listening to the price action. This is the NASDAQ 100. We're going to hit uh kind of the price action analysis here back to back. And again, I think we got our nice higher low that we got put in here on Thursday.
Potential higher low, right? It's not confirmed yet. And notably, you do have some more weakness here, right? Take a look at the SPY chart. SPY got all the way back, basically made new all-time closing highs on Friday, but the NASDAQ 100 is certainly off those highs. So, you do have a little bit of kind of negative divergence here that you could kind of say technology is weakening just a little bit on the margin.
So that is, you know, something we want to pay attention to. But again, broadly speaking here, we held the critical levels. I think 550 or so is going to be a good intermediate term line in the sand. Maybe we chop it out for the next couple of weeks into September, but um for now, you know, the the the big correction has has been saved for now, right?
Anything can happen, but price action so far is uh is is still hanging in there. Here's the VIX. Uh VIX again kind of rising all week into the event and then we saw a good plummet here. 14 spot 222. That's good for new I believe new year-to- date lows. I think this would be the new uh closing low on the year.
You can see the VIX has just been kind of sloping down, grinding down in this channel. And those are some new lows. The dollar got absolutely hammered on Friday's move here. So, um this speaks to some of the commodity action we saw as well and gold and oil and crypto. um all you know loving the dollar kind of falling off a cliff here on Friday.
It was a big uh one-day move. 10-year Treasury yields also moving down here in lock step uh 4.26 not quite at cycle lows but you know rolling over and you definitely are in this series of lower lows and um well lower highs for sure and you got marginal lower lows in the in the uh 10-year Treasury yield.
So sector performance on the week, it was again a pretty strong showing across the board. Energy, real estate, and materials were actually your three biggest. Those are different groups. And that's, you know, again, some of that small cap strength that we're seeing. It's not just technology and communication services.
In fact, take a look at where they were, right? And this speaks to some of that NASDAQ underperformance. So you definitely had some rotation. You had sort of um, you know, with with rates, you know, coming down. it's it's just more cycllically tied to some of the real world economy stuff and some of the more profitless companies.
Uh but those were the things that were certainly getting uh pushed to the upside this week. Uh in terms of our smart trend filter, this is our uh indicator built for TC2000 and Trading View users. It's available on our website. Uh you've got four sectors in a clear bullish state here. So um this looks across price, volume, and time and price action relationships.
And so there was a little bit of uh you know damage done or a little weakness from beginning of the week into Friday. And so the four strongest out the gate here or or coming out of the close is healthcare staples, materials, and communication services. Uh notably materials is the is the interesting one because that's kind of a the first fresh buy signal we've had there in quite some time.
Staples, healthcare, they've been working recently. Communication services still working. pretty much everything else here is neutral. Um and and and you know, most of this will likely turn up to our bullish state early next week as long as that strength sits in there. But um you know, with some of the selling pressure we saw throughout the uh beginning of the week, they sort of penalized a little bit of our uh outlook here on some of these other sectors.
52- week highs and lows. Now, this does not have Friday's data, so I'm going to be very interested. I record this video before I get the final numbers in. So, we'll have to see what this looks like next week. Uh, but I'm expecting a pretty good uptick here in the number of stocks hitting 52- week highs.
I'd be curious if it's going to take out the highs here from August the 15th, I believe this was, um, when we saw that nice push. I have a suspicion it will. Um, and if we can get some more breath thrust here underneath the hood, that's going to be very positive for us as we move into September. Uh, percentage of S&P 500 stocks.
Don't have too much to say. Put call, don't have too much to say. Here's Bitcoin. uh three-month chart. So, we came back down and we challenged the uh kind of August lows here or late July lows and we held we pivoted and uh again, this was Friday's candle and it um saw a nice kind of range expansion to the upside.
Looks like a double bottom here that could be in place. That's what bulls are going to want to defend against now. I think it's an important spot. I think if we lose this, you know, I've been saying 110. This looks like we were got to it down to about 111 or so. Um, but I I don't want to see this, you know, fall too much, you know, lower.
I really want this low to to to try and hold here for Bitcoin. I think it's important structurally. Uh, so we'll see if it can moving forward. Uh, I don't, you know, I I would be surprised if it just goes off to the races here. There's still some overhead supply. There's still, you know, a couple of failed breakouts.
So, I think, you know, bulls need to collect themselves a little bit, but I think it's a good hold down here. I'd love to see us just kind of chop around for a couple weeks and then make a run at those highs again. Um that would be, you know, nice and bullish to me. I'm still long Bitcoin across multiple uh trading systems and accounts.
So, uh we'll see if it can hang in there. Uh Ethereum uh deserves its its uh shout out this week. This is Ethereum. Uh since 2022, this has been in a uh draw down basically and it is finally back towards those 22 levels. I think we officially broke out. Maybe we I mean, we're basically right there. Uh we may have tagged all-time highs briefly, but you know, when you look at this uh weekly chart of Ethereum, it is a pretty constructive looking chart.
Uh I know all the Bitcoiners will sort of hate this. Uh I get it, but uh it's it's, you know, doing its thing. It's got its time in the in the in the spotlight right now. you've got a lot of champions of um Ethereum and some different companies now and trying to put it on it on their balance sheets and so we'll see how it all turns out.
I don't have um really any skin in that game. In terms of some stocks though that um we can look at. So I wanted to highlight a few stocks. This is coming from our momentum uh trading model. This is Quant Rockets which we launched a couple months ago. And so uh NXT, I've talked about this. We had a trade in this somewhere in here and then got sold out in here and now it's back involved.
So, it's been a little bit of a whipssaw action. Had a trade, got out of it, now it's back in. Uh, you know, technically here looking pretty good. Nice, you know, kind of structure in here. Just want to see if it can start to clear and trend a little bit uh cleaner. It's not overstretched. It's got a good looking uh pattern towards it.
Tesla is another one here. And again, this is one that we had a trade, you know, tried to get involved in it, sold out basically at break even. And now our model identifies this again uh just the other week. And now here it goes. This coming into today, you see the status of a warning sign here is because it was on the chopping block coming into Friday.
This was basically like, hey, you know, you've got about a day or so to get your act together before you get dropped off our our uh quant model. But it held in there, right? And we saw this nice push up. So, we'll see if it can uh continue to move. But Tesla is something uh we have coverage on and we like and I left I'll leave you with one more which is uh United Airlines.
This is a recent entry here. Uh and so this one is starting to work again. Nice expansion up on Friday. Um but these are three stocks that our momentum model likes at this time. If you want to know more about how that how that operates, we've got uh information on our website at this address. All right.
Um now, thinking about next week, we do have an important date to um remember, and ironically, I don't remember it, but it's next week. And so, I'll have to look it up. Uh but it's Nvidia earnings. I'm guessing Wednesday, but I could be wrong. Um but check check out when that date is because I will right when I'm done recording.
And so Nvidia here has been, you know, really kind of just floating higher in a pretty, you know, cool, calm, collected trend since the April lows. It looks a little messy now. In the short term, it did break this slope in this uptrend. Let me see if I have another chart. No, that's the only chart I brought.
So, you know, it looks a little challenged here from a price action perspective. um just with this supply kind of hanging in here in this 180 zone. So, I don't really love the look, but earnings is going to catalyze this stock, right? And I believe I I I did look um earlier today, it was about a 7% implied move in Nvidia.
So, that's basically 12 points up or down. So, you know, you're talking call it 160 to, you know, closer to to 190 somewhere up here. like those are your kind of goalposts of where this stock is implied to move post earnings. Of course, it could be bigger than that, but um that's just some food for thought.
This is obviously uh kind of the center of the AI thematic uh you know build out and trade that this whole market is is essentially levered up on. So uh it's an important one to pay attention to and it's an important one that the market will be you know kind of sifting through in terms of guidance and any color that we can get from uh you know capex buildout and and and all that fun stuff.
Uh but besides Nvidia um we have PCE price on uh on Friday. Um got jobless claims out and uh some durable orders. So, you know, pretty light week. Some sentiment data as well, but there's some things to pay attention to on the econ side, but I would say Nvidia is probably going to trump all of that um next week.
So, that's it. That's what I have. That's the uh roundup for this week. Hopefully, you made it through. Okay, you didn't get uh too turned upside down for the first four days of this week. Powell came to the rescue. I do still think that right now the hardest trade is to stay long. Um that could change, right?
Uh we do these videos every day because price uh continually, you know, advances and and we continue to interpret price action, but from what we're seeing here, most of our models are basically still saying risk is on. There's some choppy signals, but um rotation's happening and we'll see how we can shake out through the end of August.
So, that is it for me. Thanks so much for tuning in. If you liked it, like it. We've got links in the description of the show. Have a great weekend. We'll see you back here next week.
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