It’s been more of the same in this holiday-shortened week, with the Nasdaq up a couple of percent, the S&P also sporting gains, but most of the rest of what we look at is flat to down on the week.
Thus, the evidence remains the same from a top-down perspective, with the big-cap indexes looking fine and the rest of the market basically doing nothing as it chops sideways.
With that said, we are starting to see a couple of things under the market’s hood that we want to mention. The first is that growth measures are slightly shaping up—the iShares Momentum Fund (MTUM) and the IBD 50 Index are holding above their springtime highs, and the equal-weight Nasdaq 100 (QQQE) has tightened up just shy of its springtime high after three-plus of base-building. Decisive upside moves from here would be intriguing.
The second thing concerns individual stocks, where we’re starting to see something similar to QQQE: More names on our radar are starting to tighten up above moving averages—which, again, could lead to some fresh leadership if the bulls pounce.
Of course, those are two potential positives if more buying power emerges; right now, we’re still seeing washing machine-type action, where most stocks are getting tossed around, there’s plenty of selling on strength and, even on days when the big-cap indexes do well, few stocks are hitting new highs. (The 10-day average of new highs on the Nasdaq is at the same level as in mid-April, in the throes of the spring correction.)
As we leave behind this relatively slow period (two of the past three weeks have had mid-week holidays), earnings season is set to rev up, which, along with Fed rate cut speculation, will probably tell the tale. For now, we continue to position ourselves in a cautiously bullish stance—taking opportunities when they arise but aiming for good entry points, honoring stops/loss limits and taking partial profits somewhat quickly if they appear.
We’ll leave our Market Monitor at a level 7, but once again, it’s mostly a stock-by-stock situation at this point given the narrow environment.
SUGGESTED BUYS
Halozyme (HALO) hasn’t roared ahead since its big patent-related rally in early June, but it has held up well and, like some other names, is beginning to tighten up. Dips toward 50 or 51 would be tempting if you’re not already in, with a stop in the 46 to 47 range to control risk.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
Sweetgreen (SG) – tripped stop
SUGGESTED STOPS
Broadcom (AVGO) near 1,530
Burlington Stores (BURL) near 225
Carpenter Tech (CRS) near 99
Credo Tech (CRDO) near 27.5
Crox (CROX) near 142
Dycom (DY) near 163
Dutch Bros. (BROS) near 37
Freshpet (FRPT) near 122
GE Vernova (GEV) near 164
Hims & Hers Health (HIMS) near 18.5
Howmet Aerospace (HWM) near 76
Natera (NTRA) near 101
Onto Innovation (ONTO) near 209
Pinterest (PINS) near 41
Robinhood (HOOD) near 19.8
Seagate Tech (STX) near 96
Taiwan Semi (TSM) near 160
Trade Desk (TTD) near 93
