00:00Uh, what about the defense sector here?
00:03Uh, you're looking at, uh, I, I mean, things are heating up all over the world.
00:08Doesn't seem to be getting much attention, but, uh, the U S aerospace and defense ETF
00:14is paying attention here, uh, just hovering consolidating near it's all time highs.
00:21Talk about that.
00:22And, uh, some of the ETFs that are related to it.
00:25Yeah.
00:26I get a lot of questions.
00:28Uh, you know, what sectors do you like to, you know, what party do you think is gonna,
00:33you know, help the most.
00:34And there are two, I like regardless of outcome in this election.
00:38And that is the defense sector, the ITA, which is knocking on that door.
00:42And then what I do when I look at these sectors, I look under the hood and yes, Boeing is in
00:46there and Boeing has held it back.
00:47Just like CrowdStrike has held back the hack and the cyber ETFs.
00:51But um, when you look under the hood, you look at Northrop Grumman, you look at general
00:54dynamics, um, Lockheed Martin, Raytheon, these stocks are best in class and they're
01:01making new highs and their strength there.
01:03And then here's one, look at GE, GE is one of the biggest players in that space.
01:09It's been consolidating now for the better part of five months, a hell of a run.
01:13Uh, talk about splitting up companies and, and being the beneficiary of a split GE had
01:20done nothing.
01:21It was dead money for, for years.
01:23I may even throw decades out there.
01:24Um, and all of a sudden, you know, the sum of the parts was greater than the whole.
01:29And uh, when people talk about Alphabet, I think we have a story lining up there too.
01:34But GE, uh, is leadership there and it's knocking on the door.
01:39So I think you've got to watch this sector closely and watch the individual stocks within
01:44it.
01:45Uh, it's, as you mentioned, a lot of geopolitical concerns, a lot of, a lot of bad things happening
01:50in the world, unfortunately.
01:52But this is a sector that does well.
01:54I think both candidates are going to have to and continue to spend on defense.
01:59So you look at ITA and then you look at cybersecurity.
02:03We know how important that is.
02:04And CrowdStrike, you know, CrowdStrike had their, I don't know if I want to go as far
02:09as their Bud Light moment, but it's going to take them a little while to come back from
02:14this.
02:15I don't think you want to jump into it, but what people are doing is they're reassessing,
02:19all right, is CrowdStrike the partner I want to be in?
02:22There are other great names within the cyberspace that have been doing well.
02:26You look at Fortinet, FTNT, you look at Checkpoint, and then now you look at Palo Alto Networks.
02:32Palo Alto is a great example.
02:33If you back out the chart on that one, you see some serious gaps and when they miss or
02:38when they guide, it gets punished.
02:40But long-term, the overall trend is there.
02:44The strength is there.
02:46Uh, so CrowdStrike will probably come back one of these days, but it's not going to happen
02:52overnight.
02:53Uh, if you want to buy it, put it away and not look at it every day, then you should
02:57be fine.
02:58But, uh, I think the safest way to play cyber is using the ETFs.
03:03It's not as exciting as owning an individual stock, but if you look at hack on the verge
03:08of a major breakout, it may have just done so.
03:11So risk reward setups are there for traders.
03:14Um, you know, I had this difficult job of coming from a person that traded as a day
03:21trader, professional day trader on the floor for 28 years now into this analyst role, talking
03:25to clients who are a little more long-term based.
03:27So I try to balance it.
03:29I know your audience wants great ideas and you give them to them every day.
03:32Um, so I'm trying to thread that needle when I come, when I talk to you looking, all right,
03:38long-term risk reward, good setups near-term, and, uh, you know, I think that hack, look
03:43at that little rounded bottom and, uh, cup and handle, possible breakout.
03:48The stocks within the ETF are great.
03:51If you can pick the right ones, then you're going to do better than the overall ETF.
03:55But if you, if you pick something like a cloud flare that had a rough quarter last quarter,
04:02consolidating could go on a nice run.
04:05You missed a little bit.
04:06Uh, if you had CrowdStrike, you got hurt, but if you had the basket, you avoided the
04:11down draft that you saw in some of the individual names that didn't, uh, you know, help the
04:16overall ETF, but individually they got, they got clobbered.
04:20So I think from a safety point of view, you go with the ETF and to some people that's
04:25a cop-out.
04:26I want one name.
04:27I want it now.
04:28Um, and then I mentioned this one on Bloomberg yesterday and even the host goes, Cisco, uh,
04:34look at Cisco for me.
04:36You want to look at a nothing chart, go back 20 years on this thing, it's done nothing.
04:41I don't know if this is the make or the break, but on a short term basis, it broke an intermediate
04:49downtrend.
04:50Um, the story with Splunk, I think is starting to finally be digested.
04:55That was a big merger when they acquired Splunk, which is in the cybersecurity space and he
05:01finalized that deal at the end of March.
05:03So we're about six months in, I think they're starting to reap the benefits of that.
05:07We had a nice gap, nice breakout.
05:09I believe we're above the 200 day moving average, just memory.
05:12I can't see it on our chart in front of us, but, um, the risk reward set up their intermediate
05:19term, you know, we got another 10 to 15%.
05:21Okay.
05:22Long term, my God, it's got a lot of wood to chop, but the direction is there.
05:27Like talking about this is like talking about AT&T and Verizon and it's just, no one knows,
05:33but it is still in the doubt.
05:35I don't know how, but it's still in the doubt.
05:37Um, don't get me started on Intel being in the doubt, but, uh, Cisco to me looks like
05:42something's changed and when something's changed, you know what?
05:46I like the risk reward set up there and, uh, I'll take a flyer on it.
05:50Yes.
05:50I've owned it in the past.
05:52I owned that stock for a decade.
05:53It did nothing for me.
05:54Uh, but now I think, yeah, I think it's, it's interesting and it's worth taking a flyer,
06:01but it's not going to give you an Nvidia day or an Nvidia return.
06:05Uh, so if you like boring, I give you Cisco.
