In the second episode of TheStreet Stocks & Markets Podcast, Chris Versace is joined by NYSE trader Jay Woods to discuss the state of the market and the stocks you should have on your radar.
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00:00Welcome, everyone, to The Street's Stocks and Markets podcast.
00:06I'm Chris Versace, Portfolio Manager for the Pro Portfolio at The Street Pro.
00:10And joining me today to break down what's driving the markets and share what he's watching
00:14is Jay Woods, Chief Global Strategist at Freedom Capital Markets.
00:19Jay's also a board member at the CMT Association
00:22and an adjunct professor at Fordham University, one of my alma martyrs.
00:30Jay, I've got to thank you for joining us.
00:34Really appreciate it.
00:35You're kind of new to some of the folks at The Street,
00:38so tell us a little bit about your investing style and kind of what you're paying attention to.
00:43Yeah, for me, it's always about risk management and then setups from a risk-reward perspective.
00:49So just a little bit of background.
00:50I started as a trader here for 28 years, so you have to know your time frame.
00:54And when I was a trader here, market maker back in the day,
00:57the time frame was minute by minute, second by second.
01:00And it's not anymore?
01:01Well, it depends what we're talking about.
01:03We want to do a deep dive into some Anchor VWAP stuff.
01:06We can do that.
01:07But no, now I've pivoted into a market analyst,
01:10and I take a lot of my experiences from this trading floor,
01:13and I put them into broader perspectives.
01:15I talk to more of a retail base and family office customer base
01:20that we're looking at different time frames that may be intermediate,
01:23three to six months, or longer term.
01:25And then for my own investing, I had my own rules.
01:27For a job, I did this minute by minute.
01:29But for my own investing, put it away, buy best in class,
01:33buy strong technical strength, and not look at it every day.
01:37And I got to focus on my job of looking at 30 stocks minute by minute every day.
01:41So you're an investor or a trader, would you say?
01:44I am both, and I like to put both hats on and combine the two when talking to an audience.
01:48So when we talk through ideas later on in this podcast,
01:51we're going to be talking on time frames, good entry points, good risk reward setups.
01:57And then once someone gets into that name, make it their own.
01:59Because once you own it, you have to have that time frame.
02:04What is my goal here?
02:05And then once you achieve that goal, are you going to let it ride?
02:08Are you going to take profits?
02:09You know, that's a great point because it's an evolving landscape.
02:13Of course.
02:14There's always new data, fresh insights, and sometimes you might have to, you know, let it ride.
02:19Other times, you might have to harvest.
02:21Yeah, and if you haven't noticed, it's been a little volatile lately,
02:23so time frames are quick and goals are met very quickly from tweet to tweet, as we like to see.
02:31Tweet to tweet, well said, well said.
02:33So let's talk about the market environment.
02:36You know, for some folks, challenging.
02:39Other folks, more painful.
02:41You know, if we dial back to February with the start of, you know, the first round of Trump tariffs,
02:46what were you thinking was going to happen?
02:48Have things played out that way?
02:50Yeah, let's back up to the election.
02:53When we had that euphoric, things are going to be different, things are going to trade a certain way.
02:58Tariffs were a concern, but we didn't know the extent of that concern.
03:02So the word of the year since Trump's been in office is uncertainty,
03:06because we aren't certain exactly how tariffs are being used.
03:10Are they a negotiating tactic?
03:11Well, how long they might be.
03:13Exactly, who will be implicated by them.
03:16So there are a lot of questions, and every day we look for answers,
03:20and it seems like we get one answer, but three new questions.
03:23So it is volatile.
03:24Magic 8-Ball?
03:25So, yeah, who knows?
03:26Whatever works.
03:27Right, right.
03:28You know, when the magic 8-Ball's on a roll, you stay with it.
03:30That's the trading superstition in me.
03:33But, no, you know, what I do is I always follow price action.
03:36As a market technician.
03:37Now, hang on.
03:38Let me back you up.
03:39Go for it.
03:39Price action.
03:40What does that mean?
03:40Price action, you look at something as simple as the last sale.
03:43All right?
03:43Once you buy a stock, you're anchored to that price.
03:46That is your, you know, level where if it goes up, you're making money.
03:49If it goes down, I'm losing money.
03:51And when it goes down, you look at it differently.
03:53And you have to game plan differently.
03:55So whenever we talk about trade ideas and time frames, I want to know exactly what that ultimate goal is by someone getting in.
04:03And when I set up trades, you look risk-reward.
04:06There's always risk involved when people get into a trade.
04:09Of course.
04:09You don't buy it.
04:09Well, my teenage son may differ.
04:12You know, we buy it.
04:13It's going to the moon.
04:14And Palantir was up, you know, 10 straight days.
04:17And then all of a sudden it changed.
04:19But you have to know what's my downside risk.
04:22Right.
04:22It's a horrible way of looking at things.
04:26No.
04:26But when I did it down here.
04:28I totally disagree with you on that.
04:29I think you have to do it.
04:30You know, one of the things that I try and do is triangulate price targets higher, right?
04:35But I also try to triangulate my downside risk and then look for a net upside number.
04:40That's what I do.
04:41Well, I'd like to be an optimist and shoot for the moon, too.
04:44But, yes, if we're going to preserve capital, which is the most important thing, live for the next trade, you have to know, all right, I made a mistake.
04:53I make them all the time.
04:54But I limit those mistakes.
04:55And there are so many different ideas to go from.
04:59If one trade doesn't work, on to the next.
05:01Or get out, minimize the loss.
05:03And let's reevaluate, get back in at a better price point.
05:06So you've been doing this a long time.
05:08A lot of, you know, on-the-floor experience.
05:10And when I hear you talk about what you just said, it sounds like the book of stocks that you're running is very large.
05:18Yeah.
05:18Right?
05:18But for the average person, right?
05:20A lot harder, right?
05:22So from your experience, what's a sweet spot for the individual investor in terms of portfolio size?
05:28Yeah, portfolio is, you always want to buy best in class.
05:30So relative strength is what I look at.
05:32And how is Walmart doing versus its other peers in the staples sector?
05:37And that's from a technical perspective?
05:39It's from a technical and a fundamental perspective.
05:41You want to know what you're getting yourself into.
05:42I believe in the old Peter Lynch mantra, buy what you know, buy what you use, buy what you believe in.
05:48One up on Wall Street.
05:50Yeah.
05:50And it's the younger kids, those generations that come behind us.
05:53Now there are a few.
05:54I can't believe this.
05:55But we're getting old.
05:56And that teaches us what the next big things are going to be.
05:59So when there's new AI technology coming out, I go to the younger people who are utilizing it, learn it myself.
06:05Right.
06:05And then see what's going to be the next big thing.
06:09Not easy, but, you know, one, trading, learn by doing.
06:13You get into a trade.
06:14All of a sudden, you look at it differently.
06:16There's money involved.
06:17You have skin in the game.
06:18So that's it.
06:19But when I'm analyzing markets, yeah, people come to people like you and myself because we do a lot of the work.
06:25We've been around for, you know, a little bit of time.
06:27A little bit.
06:28Let's not age ourselves too much.
06:29But, you know, I take a top-down approach.
06:32I look at the indexes and I look at what's leading the indexes.
06:35So you better know those magnificent seven names because their market caps are kind of important.
06:39Yes, they change crazy amounts, but they are important.
06:43That's what's driving the market.
06:45Then a sector approach.
06:46You know, I mentioned staples.
06:47So you have to know that Walmart, Costco.
06:49These are some of the consumer staples that you have to be on top of.
06:53And then the Procter & Gamble's of the world.
06:55Kimberly Clark's, the Colgate-Palmolive's, all reporting earnings this week.
07:00So these are the things you follow.
07:02And then you try to find those best in class.
07:05And then those that have risk-reward setups that are favorable.
07:09So price action, to me, is what dictates that.
07:11And then when you bring technical levels into it, it really sets you up to have an advantage, you know, when it comes to trading.
07:20You know, I hate to refer to it as the game.
07:22But you want to have an advantage in the game.
07:24You want to know what stocks are set up best from a risk-reward point of view where I can make money.
07:28Because that's what we're here to do.
07:30So from a person who's more fundamentally driven, what are kind of your go-to technical metrics that you favor?
07:38Yeah, and I like to keep it as simple as possible.
07:41We can go deep in the weeds and look at each local cloud and Fibonacci levels.
07:45And I can, you know, sound very impressive and talk about that as much as you like.
07:49But basic levels of support resistance, all right, got down to this level, it's held.
07:54There are buyers here.
07:55Resistance, it gets here, it fails.
07:57There are sellers in charge.
07:59Those are the basic levels where you can just trade stocks in different channels.
08:04Breakouts, okay, what caused the breakout?
08:05News, fundamental story, obviously.
08:08And then does it have something to reverse if it's something going up?
08:12Is it making new highs?
08:13Strength begets strength.
08:14We saw 62 new highs in the S&P 500 last year.
08:18If you bought 61 of them, you made money most of the time.
08:22You're always going to miss, but you want to play momentum.
08:26So I look at support resistance, trends.
08:28The trend is your friend.
08:29It rhymes.
08:30It sounds clever.
08:30And it's a fact.
08:32And then momentum indicators on top of that.
08:34So I look for RSI, stocks that are overbought, oversold.
08:37When I see changes, something that's oversold, coming out of an oversold condition, breaking above 30 in that RSI, that to me is a buying opportunity with parameters of risk-reward set in.
08:49So to me, you have more of an upside than a downside to get in.
08:52MACD crossovers, moving average, convergence, divergence, and then stocks in the best of class.
08:57That's how I look at it.
08:58What about market oscillators?
09:00Are you a fan?
09:00Do you use those?
09:01Yeah, I mean, I'll use Bollinger Bands from time to time.
09:03But once you put too many metrics into it, to me, you're now trying to find a reason to justify your initial thought, whether it was, I walked into this store and I liked it.
09:14I like what the CEO is doing.
09:17I like the story and the region that they're moving into.
09:20There are fundamental reasons that get my attention to these stocks besides just looking at chart patterns.
09:26But when I put too many oscillators in there, then I'm getting away from my system, which I try to keep simple.
09:33And trying to justify something that may not be there.
09:36Is it fair to say that the more complicated you make it, or not you, but someone makes it, you run the risk of analysis paralysis?
09:42Well, I believe so.
09:44But, you know, there are certain times I will look at Fibonacci levels.
09:47When I look at these moves in the S&P 500, these wild swings we've seen.
09:51All right, let's take a bigger overview and look at where we were at the bottom when this bull run started back in September of 2022 to where we were in February.
10:00All right, let's put some Fib levels in there.
10:02Because Fibonacci levels, to me, from a technician, it's kind of voodoo.
10:06But these numbers, they come into play again and again and again.
10:09So if something works, I'm going to look at it.
10:11And what level was I looking at in the S&P 500?
10:145130.
10:14Where did we get to yesterday?
10:16Break and then recapture?
10:185130.
10:1938.2 retracement from the high.
10:21These are levels where you get buyers stepping into the market.
10:24So I utilize them.
10:25Not my go-to, but I will try to learn as many as possible.
10:29And this is what's great.
10:30I teach this class at Fordham University.
10:32Right.
10:32Your alma mater.
10:32Yeah, that's right.
10:33And everyone is going to find something within technicals that works for them.
10:38You have a great, like Mark Newton, and he uses GAN and WAVE technology.
10:43Katie Stockton, another great CMT we see on TV all the time.
10:46Ichimoku Cloud loves the Fibonacci retracement levels.
10:50It's worked for her.
10:52It's worked for her system.
10:53And what I found as a trader, now analyst, that my system has been beneficial to me and
10:59to the audience that I talk to.
11:00All right.
11:00Well, let me mention some retracements.
11:03Mm-hmm.
11:03You know, some other folks at the Street, Bob Lang in particular, and some others, they
11:08have said that we will likely need to see the S&P 500 retest the April lows.
11:14What do you think?
11:15Yeah, retests are important.
11:17That would be a double bottom if we got there, retested, held, and went higher.
11:21I think there's a good chance we could retest those lows.
11:24I'd like to think that the bottom is in, but retests are normal.
11:28Basically, a retest is you get to a washout level, which we got to on April 7th, that Monday.
11:34And, you know, we were down over 13.5% over three days.
11:38Right.
11:38There was fear, there was panic, a VIX spike.
11:41So we got a nice rally, 9.5% that Wednesday after.
11:45And now we're kind of making progress, churning along, not getting back above key levels that
11:50I'd like to see this market do.
11:52But this is constructive.
11:53So, hang on.
11:54Key levels to push higher?
11:55To push higher.
11:56Yes.
11:56So, we broke down from 5,500, which were the March lows.
12:00We broke the 200-day moving average.
12:02That was one warning shot.
12:04Then, you know, we had a retest of the initial March low, which was 5,500.
12:08We got back above, got to the 200-day.
12:11We failed.
12:12We retested.
12:13We failed.
12:13So, as Bob Lang says, astutely, I might add, there could be a good chance of a retest.
12:19Not only do we want to see it if things do get bad, we want to see it hold.
12:23And that tells me buyers are finally in charge if we do get that retest.
12:28Okay.
12:28But you did mention, though, that we just kind of did not move past some key levels that
12:33would suggest to you the market's moving higher.
12:35Yeah.
12:36Last week on this very podcast, Peter Schur, a global macro strategist at Academy
12:40Security, said, in his view, right now, you have to, and I want to make sure I get this
12:45right, buy the dips, sell the rips.
12:47Is that what you're saying to your clients?
12:49This is a trader's market.
12:51We are not technically in a bear market.
12:54We haven't closed 20% from the high, but you and I have lived through enough of these to
12:57know that when 65% of the S&P 500 has had a drawdown of 20%, it's a bear market.
13:03When your leadership technology, consumer discretionary, down 20%, the NASDAQ down 20%,
13:08this is a bear market.
13:09It may not be labeled in history if we don't go lower.
13:11It sure feels like it, though.
13:12But you know it's a bear market, and we're seeing some crazy action.
13:17And you see most of the volatile times occur in bear market scenarios when stocks are oversold,
13:23when stocks are below their 200-day moving average, you get what I call rip-your-face-off
13:27rallies.
13:27Right.
13:27And we saw a couple of those, and we may have a few more in store.
13:30In fact, 19 of 20 of the biggest one-day rallies in the S&P 500 have occurred under the 200-day
13:36moving average.
13:37So those are bear market conditions, and you tend to see the biggest rallies in some of
13:42the worst conditions.
13:43So a question with kind of a coin with two sides.
13:47Sure.
13:47Right?
13:47So you mentioned a washout earlier, right?
13:51How do we know when we see the market finally capitulate?
13:54Yeah.
13:54Well, we don't know until hindsight, and I've been crazy enough to try to make those calls.
13:59I made that call back in August with the Japan-yen carry trade.
14:02It got a little out of control.
14:04So what do I look for?
14:05I look for the VIX.
14:06The VIX to spike over 40.
14:07The VIX in August went over 60.
14:09I think we touched just under 60, if not 60 to the number, on this last spike on that
14:15Monday crescendo, if you will, when we found that bottom and rallied back.
14:20So you look for fear, panic, if you will.
14:23Well, guess what?
14:24That Thursday, Friday, before we had the washout bottom on that Monday, that near-term
14:28bottom for now, we were now 5% down 5%.
14:32That weekend, there was so much uncertainty, so much angst that we could set up for another
14:36Black Monday, 1987 scenario.
14:38And there were people calling for that.
14:40And it was set up to do that.
14:42And we gapped lower.
14:43And then we got messages out of Washington.
14:46Yeah, the tweets.
14:47To cool things down.
14:48But we were on that trajectory.
14:50So if you look at over a three-day period, we were down 13.5% over three days.
14:55These were levels that you've only seen three other times.
14:58When were they?
14:59Financial crisis during COVID.
15:01And then, of course, 1987.
15:03So it wasn't technically a crash, but it wasn't fun living through it.
15:08And that was the capitulation, at least over the near term we saw.
15:11And now, we got some progress.
15:13We're waiting for the next headline to drop.
15:15But there are lines in the sand, as a technician, as someone that studies price action, that we
15:20have to be aware of.
15:21So for us to say, all right, the all-clear is here.
15:24Maybe we need a retest.
15:25Maybe we don't.
15:26Maybe this will be a V-shaped bottom.
15:28Or more of an L-shape, because the V would have snapped back a little farther at this point.
15:33So an L-shape.
15:34Just to be clear as fall, and then kind of move sideways for a while.
15:37Yeah, more like a pie.
15:38You go down, you come up halfway, then you go across.
15:41That's where we are right now.
15:43So this is constructive action.
15:45And hopefully, it will slowly come back, because we're seeing things just get too crazy.
15:54A little sanity, a little deep breath, and a constructive rally based on solid earnings,
15:59tariffs, certainty.
16:01We start to build back.
16:03So we'll see.
16:03Those are the things that, if they happen, we're not saying they will, they could kind
16:09of help support the market, find its footing, and march higher.
16:12Without question.
16:13Everyone's worried.
16:14The uncertainty of the earnings growth, of CapEx spend in these mega caps.
16:19How will China retaliate?
16:22Will there be an escalated trade war?
16:24And as this goes down, the market tries to think worst-case scenario.
16:29And here's a fun fact for you.
16:30When we got Liberation Day, that was on April 2nd, after hours, the Wall Street Journal leaked
16:37something that was wrong.
16:38They said 10% tariffs across the board, and the market was rallying off of that 5,500 level.
16:44We rallied the first 15 minutes before that chart came out, and Trump said, no, we're going
16:49after each of these countries for this much, and then we sold off.
16:52The market was okay based on after hours activity with 10% across the board.
16:57Well, it was probably less than folks were thinking, because 15, 20, 25% had been brandied
17:03about.
17:04Yep.
17:04And then they saw that chart, and they said, wait, what the heck is this?
17:06Were these numbers not making any sense to us?
17:07What is that formula?
17:09Yeah.
17:09And then now, how are people going to reciprocate?
17:12And we washed out.
17:14And now, we're walking it back.
17:16We're negotiating.
17:17So, some people may not like we're walking it back.
17:20We're negotiating.
17:21We're going through things.
17:23One country at a time, we delayed.
17:25And we're calming.
17:26And as we calm, we see some nice rallies.
17:29We see some stability.
17:30And now we're in earnings season, and hopefully we see some earnings.
17:34But will we guide?
17:35I don't know how the guidance is going to be.
17:37You know, I was talking quite a bit about my concern for S&P 500 consensus earnings earlier
17:43this year.
17:44Yep.
17:44They're up 14%.
17:45Now, they're up less than that.
17:47And I think in the next two weeks, because this week, I think it's about 24% of the S&P
17:52500 reports.
17:53Next week, by market cap, four or five stocks, the big guys, they represent about 18, 19% of
17:59the basket.
18:00Yep.
18:01I think we're going to see some guidance resetting.
18:03And I think that's going to reverberate through the market.
18:05Exactly.
18:06And that will cause analysts to cut their numbers.
18:08Well, we've already seen that, though, to be fair.
18:10They have.
18:11You know, we have to lower that bar so we can exceed it.
18:13So we're going to lower it a little bit more.
18:15And that's where the recessionary fears come in.
18:18You know, is earnings growth really slowing?
18:20How tremendous is it?
18:21But quarter over quarter, year over year, earnings are up.
18:24And these companies are doing all right.
18:26But this wave of uncertainty, this unknown implication of tariffs has got people on edge.
18:31And you hear that R word bandied about.
18:33Look, you're seeing some companies like either American or Delta, I forget, pull their guidance.
18:39Yeah, Delta.
18:39United gives, you know, scenario guidance.
18:42And other companies are reiterating their guidance.
18:44So it's kind of all over the map.
18:46Yep.
18:46But I think it's going to require, at least from a fundamental perspective, as we get ready for these reports, to dig into, all right, what companies, what sectors are likely vulnerable?
18:56Yep.
18:56Because there's others like Quest Diagnostics.
19:00Great numbers this morning.
19:01Yeah.
19:01Right.
19:01And reiterated their guidance.
19:03You know, they're viewed as a arguable safe haven.
19:06Yeah.
19:06And that's what investors want right now.
19:08They want to be in that safe haven, whether it's a flock to gold, which is getting a little overbought.
19:13Or if it's a staple, a utility with a dividend, these stocks will go down the least.
19:19Doesn't mean they won't go down, but they'll go down the least.
19:21They'll pay a dividend.
19:22And it's a comfortable place to park your money if you're keeping it in this country until things get a little bit better.
19:30So let me kind of switch gears here because, you know, the pain in the market, you know, some people see stocks down, you know, 10, 20 percent, some way more than that.
19:41Yep.
19:41And they're tempted to, like, throw in the towel.
19:43But there's this other school of thought of time in the market, not timing the market.
19:49Yeah.
19:50What's your thought on that?
19:50Well, that's about perspective.
19:52And when you put things in perspective, when you live through these times, they're horrible.
19:56And you always think this time is different.
19:57And there are always different reasons for the sell-offs.
20:01But over time, the S&P 500 is constantly putting the best companies within the index into the index.
20:07Perfect example.
20:08We brought in Uber, like, about a year ago.
20:10What did we kick out?
20:11Alaskan Air.
20:12Do the eye test.
20:12Would you rather own Uber or Alaskan Air?
20:14All right.
20:14The eighth biggest airline that couldn't even merge with Hawaiian.
20:17Or did they merge?
20:18I don't know.
20:18I think they did.
20:19I think they got that.
20:20Eventually.
20:20That one they got through.
20:21The 49th and 50th states could merge their airline.
20:24But, you know, Uber is a company with high growth technology factor.
20:29Diversifying their revenue business.
20:31Exactly.
20:32And so I would rather be in it.
20:34And the S&P 500 will rebalance.
20:36So the indexing is generally going to work out over the long term.
20:40But the short-term bumps, these hiccups, they are not fun to live with.
20:44So how do you sidestep being head-fed?
20:49Mm-hmm.
20:50Not easy.
20:51It's not.
20:51The trader in me is trading a little more actively on paper because I have rules that
20:57you have to hold for a certain period of day.
20:59Right.
20:59And I miss those days when things are going crazy out here and I'm not in my post and
21:03I can't jump in and out.
21:05But, you know, it's all about perspective.
21:08And these are situations that, like I said, each time is different.
21:12The headlines are going to be crazier than ever before.
21:16We've seen that.
21:17But these 500 companies in the S&P 500, these small cap, mid cap companies that continue to
21:23grow, they'll get it right once they get clarity.
21:26So I'm not concerned about it.
21:28Now, will it affect our bottom line?
21:30Will it cause inflation?
21:31Yes.
21:32Could it cause a recession?
21:34Possibly.
21:35But once they finally announce a recession, if they do, the NBER.
21:38It'll be over.
21:39We do show on this how ridiculously outdated that system is.
21:42That's when you really want to buy it because you're already six months through it and halfway
21:46out of it.
21:46So I'm not worried about a recession call.
21:49I'm worried about quarter by quarter right now.
21:52Are you worried about stagflation?
21:53Stagflation, it's hard not to be.
21:55I mean, what are we, are we getting growth?
21:57No.
21:58Could unemployment go up?
21:59Yes.
22:00These doge cuts really haven't felt, trickled through the unemployment data just yet, and
22:05they may not be as severe as some people thought.
22:08That's a good thing.
22:08But what we're seeing right now, companies aren't hiring.
22:11You talked to some college students.
22:12I got one graduating this year.
22:14It is a tough job market right now.
22:16Are they going through major rounds of layoffs?
22:19Not just yet.
22:20I don't know.
22:20I mean, those last two challenger job cuts reports were pretty heady.
22:24Yeah.
22:25But, you know, February, March, and I think the issue there is that those are announced
22:28layoffs, meaning that they will take time to trickle through the system.
22:32Yep.
22:32They're not immediate.
22:33Exactly.
22:34So we're seeing inflation possibly rear its ugly head.
22:38We're seeing job growth slow and maybe job, you know, numbers, unemployment go higher.
22:43So, yes, it's a perfect scenario.
22:45One thing that's saving us right now, oil prices, energy prices, the biggest tax on the
22:49consumer is prices at the pump.
22:51Those have been stable and going down.
22:53I don't know where eggs are today.
22:55I don't care less.
22:55I don't either.
22:56So your advice to Powell is what?
22:59Powell, stay true to what he's doing.
23:01I mean, yes, too late Powell.
23:03I could agree with that.
23:04You know, he was too late to raise rates when we started raising rates.
23:07It's too late to act to cut rates.
23:09He should have cut rates, you know, one meeting before he did when we started this downward cycle.
23:13But they delivered 100 basis points and cuts.
23:16Yeah.
23:16Do you think he's late now?
23:18No, he paused and now he was waiting for economic data.
23:22He got thrown a curveball with these tariffs.
23:24So here's his conundrum.
23:25Here's the Powell conundrum right now.
23:27He has the ability, based on economic data, he's data dependent one point at a time.
23:32Very boring, pull the string.
23:33He says it every time.
23:34All right.
23:35Inflationary data has somewhat stabilized.
23:38It's sticky, if you will.
23:39Unemployment is still at historical lows.
23:41You can give us another quarter point.
23:43You telegraphed that at the beginning of the year.
23:45But does he do it because he's bending the knee?
23:48Does he want it to weakness?
23:49Can he bend the knee?
23:50He can cut a quarter point right now and it wouldn't do anything to this market, in my opinion.
23:58But now...
23:58Whoa, whoa, whoa.
23:59To the economy or to the market?
24:01Okay, good.
24:02Oh, look at you.
24:03You're doing what I would do on a pushback.
24:05Yes, to the market first and to the economy second.
24:08I think both could benefit from a quarter point cut.
24:12I think the path to cut is still there on the table.
24:16But that tariff uncertainty is what he talked about at the last meeting.
24:20And then Liberation Day wasn't uncertainty.
24:23It was like, wait a second.
24:24Now I'm really uncertain.
24:26Because if these tariffs go through, not only is it going to be transitory with inflation,
24:31which he brought out the word transitory, good for him.
24:34Well, he tried it with Biden and Biden, we got up to 9% and it was a little more transitory.
24:38He blew it there.
24:39Now he kind of put the ball back in Trump's court.
24:42It's transitory, unless.
24:45Right.
24:45And the unless was the Liberation Day scorecard, which was greater than anyone anticipated.
24:50So now he said, look, there's too much uncertainty.
24:53Until you get your ship right, I'm not going to do anything.
24:57Because if I give you a cut now, I may have to raise rates again.
25:01And then here's the other conundrum.
25:03What if the economy gets so bad that they have to have an emergency rate cut?
25:06We have to cut to try to save something here.
25:08That is not what you want to see.
25:10So that's a scenario you want to avoid.
25:12So strap on your fundamentalist hat.
25:14Join me.
25:15I'm joining.
25:17April data, May economic data.
25:19How important is that?
25:20It is important because now we're getting into the heart of the Trump presidency.
25:25And the tariff time.
25:25And the tariff time.
25:27We're seeing small impacts right now.
25:30I don't think the economic data is going to be as bad as people are fearful of.
25:35But with China reciprocating, with that 90-day extension getting closer to a resolution,
25:43if these tariffs are greater than what we feared, then, yeah, it's going to be hard to say that the economic data
25:50is going to really support cuts at this point in time.
25:53And I think that brings us all the way back to corporate guidance, right?
25:55Because there's just so much uncertainty.
25:57You've got to be a little conservative.
25:59Exactly.
25:59And, you know, who's been the most impacted?
26:03The big mega cap names and technology.
26:05Yes.
26:06Those China trade negotiations are very important.
26:09Will there be impacts?
26:11Are there going to be exemptions?
26:13Let's focus on Tesla.
26:15Let's focus on Tesla.
26:16I mean, their China impact is pretty epic.
26:19And then you talk about the rare earth materials that they get from China.
26:23That's right.
26:23And that region to power the battery, which is really the story of Tesla.
26:27It's not the cars.
26:28It's the energy that they can bring to fruition.
26:33And then their plans going forward with autonomous driving.
26:35That is going to be so fascinating to watch because you have politics.
26:39You have trade.
26:40You have Elon Musk.
26:41You have, you know, it's just.
26:43So it's an earnings call to listen to.
26:46I would think we're going to be paying attention to it very closely, yes.
26:49Any others this week that you'll be really focused on?
26:51This week, Alphabet, Google.
26:53Google has got litigation in Washington and then technical.
26:57You look at Google on a long-term chart.
26:59This 150 level, we got below it yesterday.
27:02We're taping this on a Tuesday where we're rallying above it.
27:05Watch it on a weekly basis.
27:07We haven't closed below 150 in a while.
27:10And we're close to 147.5, 148 on a weekly 200-week moving average that we could break it.
27:18That, to me, means something's broken.
27:20When price action has failed, where buyers step in, it's changed.
27:24So there are a lot of headlines going to come out of Alphabet.
27:28ChatGPT's got them on the ropes.
27:30This breakup, I think it could be epic.
27:33I remember AT&T and what it did for them.
27:35Yeah, but remember Microsoft that never really happened.
27:37No, it didn't.
27:38And they were dormant for 20 years.
27:40So we'll see what happens with Alphabet.
27:42But that's an earnings call and an earnings that I think we have to keep a keen eye on.
27:47And then ServiceNow in the software space.
27:50Here's a stock that was a high flyer.
27:51I think they, I don't think, I know.
27:54They didn't miss an earnings until the last quarter.
27:56That's good.
27:57Well, when you look at Bloomberg data and you punch it up, it's red.
28:01But yes, there was like a 17-quarter winning streak.
28:04But a slight miss and then anxiety about tariffs and the future.
28:08And man, oh man, did they overdo it to the sell side.
28:11Then what do I do?
28:12I put some Fibonacci retracement levels on top of it from its all-time low to its high.
28:16And we are right at a sweet spot going into earnings where I think the risk-reward is very favorable.
28:21And if it does come in, talk about relief rallies and bear markets.
28:25ServiceNow can give us a quick follow-through that, to me, is worth putting a few dollars into
28:32because the reward really is far greater than the risk over a short-term period.
28:37Well, we own it in the pro portfolio.
28:38Well, there you go.
28:39Good luck.
28:39And just for what it's worth, all the data points that we've seen about AI adoption in various sectors
28:46really speaks to, I think, what they're going to show in that earnings report.
28:51And what we know is that AI carries favorable pricing, incremental pricing, better margins.
28:57So I think that's going to help lift them.
28:59But we'll see later this week.
29:00Yeah, Wednesday afternoon.
29:01So you also, last week, kind of talked about a couple different names.
29:05I don't want to use this word.
29:08I'll use it for you.
29:08Let's just say broken charts?
29:11Yeah, charts that usually look like trash, but all of a sudden you sift through the trash
29:17when there are turbulent times.
29:20Now, let me set you up with this.
29:21Since you said trash, let's deal with the first one.
29:24And we also own this in the pro portfolio.
29:26Actually, a great stock.
29:27Waste Management.
29:28Waste Management, WM.
29:30This stock has held up relatively well.
29:32And you look at relative strength, relative performance in an environment like this,
29:36and it's been doing extremely well.
29:38Then you look at tariff implications.
29:40It's U.S.-based.
29:41The tariff implications are minimal at best.
29:44So it's something that it's like utility, something we need, we use.
29:49The growth has been there.
29:50And it's a good place to park your money.
29:53Jay, who isn't going to pay whatever they have to to get rid of trash?
29:56Yeah.
29:58Don't tell my garbage, man.
29:59My rates have been pretty stable for a while.
30:01But your waste management, technically, fundamentally, to me, those are the two things.
30:06So it's a good place to be.
30:07And the chart looks great.
30:08Just made all-time highs.
30:10Pulled back, but we're on the verge of them again.
30:12And then you look at stocks that have been so beaten down that could have tariff implications,
30:17but maybe the worst is over.
30:19Dollar Tree, Dollar General, those thrift stores, I mean, you couldn't pay me to walk into them.
30:24But right now, they're breaking out, breaking nice neutral ranges.
30:29We talked about support resistance, breaking resistance levels, breaking above a 200-day moving average.
30:33And guess what?
30:34They have something to reverse.
30:35So there's momentum there.
30:36They were oversold.
30:37Now they're coming back to life.
30:39So there could be a tailwind in some of these dollar stores where people have been kind of shrugging them to the side.
30:47And then watch Target.
30:48Target's not a buy to me yet.
30:50It's been in a horrible downtrend.
30:51Their CEO was just in Washington with the Home Depot CEO and the Walmart CEO talking with the president.
30:58That price action's starting to stabilize.
31:00It's got a little bit of a gap to get back to above 98, 100.
31:04So if it gets there, we could see momentum and a reversal in Target.
31:09So there's another stock I'm watching.
31:10But if you want to be best in class, Walmart, buy it, put it away.
31:13It's in my 401k.
31:15I don't look at it.
31:16Costco?
31:16Costco.
31:17Another one.
31:18You're just top two.
31:19It's, you know, and if you think of Costco, we'll talk about a loyal user base.
31:24Membership.
31:25That membership matters.
31:27They finally, it took seven years, and they finally increased that membership fee.
31:30Right.
31:30We'll see that benefit roll throughout the coming quarters.
31:32Rolling in, and no one left.
31:34The hot dog's still $1.50.
31:35That's right.
31:36That's right.
31:36So, you know, people go in there, they get their hot dog soda.
31:39That hasn't changed.
31:40So they mess with that, then maybe we'll rethink our schedule.
31:44Maybe, maybe.
31:44All right.
31:45So before we get to some member questions, just one last thing.
31:48Since you mentioned the dollar discount stores.
31:51Yeah.
31:52TJX.
31:52Any thoughts?
31:53TJX?
31:54No, I mean, it fits into that mold.
31:57Right.
31:58My mom likes it, but I think there are better places to be.
32:02It's had a nice little run as of late, right?
32:05Yep, yep.
32:05That's right.
32:05But, you know, it fits that mold.
32:08But, no, I think there's more boom possible risk-reward scenario, where if these DG, Dollar
32:15General, Dollar Tree, DLTR, break the 200-day moving average, I get out.
32:18But right now, the momentum is there, and it's starting to really make its move.
32:21TJX, I think we just missed a bit of that move.
32:24So I wouldn't be there.
32:25All right.
32:26Member questions.
32:26So let me look into the teleprompter here so I can get this right.
32:30Okay, here we go, Jay.
32:31First question.
32:32All right.
32:32Considering Trump's so-called Liberation Day on April 2nd, something you already talked
32:36about, and the resulting near total collapse of the bond market, and given Trump's tendency
32:41to irrational, or I guess for irrational behavior, can you foresee the possibility, Jay,
32:47of another such episode that this time we could see a global financial collapse?
32:53What do you think?
32:54Or do you think the worst of it's behind us?
32:56I hope the worst is behind.
32:59This is a question trying to get into the mind of Donald Trump.
33:03Good luck.
33:03Good luck.
33:04Trying to get into the mind of the people that have to go in and say, sir, that's probably
33:08not a good idea and not cause a problem.
33:12Bessent has been trying to do his best at delivering the message, and we saw it one weekend.
33:17Okay, China tariffs, they may come down, and Bessent delivered the message.
33:20Trump put out a tweet.
33:22That was on a Saturday.
33:23Sunday afternoon, Lutnik goes on TV and kind of blows it up.
33:26Yeah, it's just temporary.
33:28So we need to get them on the same message.
33:30So for me to make any prediction...
33:32And to be consistent.
33:34Consistency is key.
33:35I don't think we've seen anything like that.
33:36This is very different than the first Trump administration in that he's got loyalists
33:41around him that won't say, sir, this isn't a good idea.
33:45And we're seeing it in different branches.
33:48But now with the economy, we don't have Gary Cohn in the room.
33:52We don't have some of his Larry Kudlow's around him.
33:57He'll talk to him on TV.
33:58Jamie Dimon went on the Maria Bartiromo show and directly delivered a message.
34:02And that also happened to be the day where he turned.
34:04So people will go to where they can get his year.
34:08But for me to say, oh, predict what's going to come next?
34:10No way.
34:11I can't do that.
34:12Okay.
34:12All right.
34:13Jay, what are your go-to technical indicators?
34:15And how should a new investor utilize technical analysis as part of their investing acumen?
34:21Well, you have to know price.
34:22Only price pays.
34:23Only price is fact.
34:24Earnings, they restate earnings estimates all the time.
34:26It's just an estimate price.
34:28You bought the stock.
34:29You know where you're anchored to.
34:30And then you want to manage that risk.
34:32So to me, key levels of support and resistance, things we talked about, that is, okay, we're
34:38getting to a level buyer step in.
34:40It fell below.
34:40Something's changed.
34:41Then I like to look at relative strength index, the RSI.
34:44That measures, and we put it up on any charting, RSI, you know, it levels of 30 and 70.
34:5070 means overbought.
34:51Doesn't mean the stock is going to reverse or go down.
34:54But when it comes back from an overbought condition to under 70, take some profits.
34:59It's trim.
34:59That's okay.
35:01And you're probably going to see a sell-up.
35:02But I like to set things up on a buy stop scenario.
35:06When I was down here, I would buy more stocks on a buy stop.
35:09If it gets above a certain level, I want to buy.
35:12Why?
35:12Because momentum's coming into the name now.
35:14But if you like it at 31, why didn't you buy it at 29?
35:16Because I didn't get the confirmation.
35:18So to me, I will miss a little bit to try to get the meat of the trade.
35:22And you're happy to?
35:23I'm happy to, yeah.
35:24As long as I'm getting the meat of the trade and an entry that I feel comfortable, that's confirmed with an RSI crossover or a MACD crossover, then I'm okay.
35:32Of course, you know, I'm going to wish I bought the bottom.
35:36But good luck trying to catch a falling knife.
35:38I've seen a lot of people get hurt that way.
35:40And from a risk-reward point of view, you need parameters.
35:44So I will miss the lows.
35:46I won't sell the highs.
35:47But as long as I'm making money consistently, hitting singles, doubles, an occasional triple, maybe a home run, then I'm okay.
35:54Okay.
35:55And then next question from one of the members is, you know, a lot going on.
35:59But are there any sectors you're warming up to?
36:01You just mentioned some of the dollar stocks.
36:03Anything else out there that you're really keeping your eye on?
36:06I'm keeping an eye on technology and discretionary.
36:08These are the two most beaten down sectors there are.
36:10So there are going to be opportunities in these stocks individually within the sector and the sector themselves.
36:16You know, 20% correction means we're probably going to get a 5% or 6% snapback rally.
36:21When that is, I don't know.
36:23But I think from a risk-reward point of view, the worst for now may be over.
36:28And it's worth nibbling.
36:29And I say nibble.
36:30If you have $10,000 on the sideline, I wouldn't throw all $10,000 into it.
36:34Just a little bit.
36:35Just a little bit.
36:36And then, yeah, then be mad at yourself because, oh, my God, I missed.
36:39I could have put $10,000.
36:41Those are the trades I beat myself up.
36:43Oh, if I only put this much into it.
36:45But I'm preserving capital.
36:47And this is a market where you have to, to quote the great Arthur Cashin from down here, be nimble.
36:51And not just go all into something.
36:55You know, pick your spots.
36:56Ease into trades.
36:57Cost average down.
36:58That's what keeps you alive a lot longer.
37:02Oh, and as you do that, you can look for technical confirmation.
37:06You might get more fundamental data that helps support the idea of, boy, now is the time to buy more.
37:10It's like you do this for a living.
37:12Something like that.
37:13Yeah, yeah.
37:13Okay, so that's areas you're warming up to.
37:17Areas as we move deeper into the earnings season you would avoid.
37:20Yeah.
37:21I do like the financials.
37:23The regionals have been letting me down.
37:25I'm kind of waiting on the sidelines there for some confirmation.
37:30Energy, very volatile.
37:32Oil prices, I don't think, are coming back anytime soon.
37:34We've seen a nice run.
37:35And then gold.
37:37I would avoid gold.
37:38Everyone's running into the safe haven.
37:40I went back.
37:41Crowded trade?
37:42Extremely crowded trade.
37:43It's had a tremendous run.
37:45It's overbought.
37:46The RSI, over 70, starting to come in a little bit.
37:49And guess what?
37:50When did gold have a run like this before?
37:52You know, 20% run.
37:53The end of 2021 into 2022 when we went into that bear market.
37:58And it took four months for it to peak when the S&P was making its lows.
38:03Well, guess what?
38:04We're four or five months into this gold rally now.
38:06And the S&P is trying to find that bottom.
38:10We may go a leg lower.
38:11We did back in 2022.
38:14But gold didn't follow along.
38:16Gold got taken for the ride.
38:17So if this market was to sell off and take another leg lower,
38:19I don't think the safe haven is going to be gold because they're going to look for places where they can take profits and they're in gold.
38:27But at the same time, if we get some favorable trade developments, earnings, maybe they're a little better than feared.
38:33Yeah.
38:34We get the market rally.
38:35Gold sell off.
38:36Gold should sell off because guess what?
38:38Those gold bugs are going to look for better opportunities.
38:40They just made a killing.
38:41Now we're talking logical.
38:43And I hate to say, oh, there's going to be profit taking there.
38:45But that's what people do.
38:47Money managers will rotate out of those assets.
38:50And a lot of rotation has gone into that safe haven.
38:53Bitcoin looks good right now.
38:54Now, I don't know when their earnings come out.
38:56I don't know it from a fundamental point of view at all.
38:59Obviously, we know they don't have earnings.
39:00But Bitcoin, from a technical point of view, has a constructive bottom, just broke out of a near-term downtrend, back above $90,000 as we tape this.
39:09I mean, at least five minutes ago when I jumped on the set.
39:13To me, I think the greater risk-reward is to the upside than to the downside right now.
39:19And it's an asset class that I can't figure out.
39:22What is it a safe haven?
39:23When do we rotate into it?
39:24But right now, the technicals are telling me people are going into it.
39:28The worst looks to be over for now.
39:30We had a nice floor that was tested multiple times.
39:33And we just broke out of a near-term downtrend.
39:36So to me, Bitcoin should rally $98,000, $100,000 over the near term.
39:41That's where I see momentum.
39:43So I would go there.
39:44Okay.
39:44Last question.
39:45About, I want to say, 18 months ago, Jay, you sent up a flare saying that Walgreens Boots Alliance, you are stinking up the Dow.
39:56Yeah.
39:56You need to go.
39:57So you were correct.
39:59Yeah.
39:59Now it's performed well and it's being acquired.
40:01You kick them out.
40:02But that's all right, though.
40:03But is there any company you think that either should be added to the Dow, should be bounced from the Dow?
40:09You know, I'm actually not that big of a skeptic right now on the Dow.
40:13Everyone's going to say, oh, it should be Nike because it's been decimated.
40:16Intel got kicked out.
40:17That was my next target.
40:18And I didn't get to really come and pontificate to you about how much I hated Intel.
40:22But they did the right thing.
40:23They took out the weakest link, Intel, and they put in NVIDIA.
40:27So to me, the rotation's been there.
40:29They put Sherwin-Williams in, kicked out Dow of the Dow, which I didn't see the need to do that.
40:34I like Dow in the Dow.
40:35That makes sense.
40:36But as far as movement goes in the Dow, if you're going to kick out a Nike, what are you going to put in?
40:41Are you going to put in a Lululemon?
40:43Yeah.
40:44I don't see.
40:45This is why I asked you.
40:46I know.
40:46And Disney for maybe a Netflix.
40:48Okay, there you go.
40:49Oh, interesting.
40:50Maybe they do that because you talk about relative strength.
40:53Netflix held up great after earnings.
40:56The growth is there.
40:57The trajectory continues.
40:58Tariff-free.
40:59So, all right, I'll go out on a limb.
41:01Well, the other thing before you do is people may cut back and downgrade their subscription.
41:09But now it's supported by ads.
41:11It is.
41:11Very different than in the past.
41:12They've downgraded.
41:14And those kids that are finally getting off my plan, thank you, God, and having their own Netflix accounts,
41:19they're going for the cheap one.
41:20They'll sit through the ads.
41:22I can't sit through ads.
41:23They got me hooked.
41:25But the point is, if you're Netflix, do you care if people downgrade?
41:29No.
41:29Because you're getting it made up in ads.
41:31No, and now they're streaming live sports.
41:33Yes.
41:33And how did that go?
41:34I mean, the boxing match a little.
41:36We saw too much of Tyson in one clip, and then the streaming was a little laggy, but they fixed it.
41:42It'll get better.
41:43Yeah.
41:43They're Christmas Day.
41:44They're coming back.
41:45I don't know who they have.
41:46Do they have my Eagles on Christmas Day?
41:48They should.
41:48Do they want ratings?
41:49Your Eagles?
41:50You want my Eagles, my birds.
41:51Okay.
41:52So, yes, well, there.
41:54You're not a fellow.
41:55You're Washington.
41:56What are you guys?
41:57I live in Virginia, but I'm from the New York area.
42:01Okay.
42:01So, Jets or Giants?
42:04Moving on, Jay.
42:05All right.
42:05Moving on.
42:06We shall.
42:06We shall.
42:07All right, folks.
42:08And please remember that if you want to get your questions asked on the podcast, you need to be a pro member.
42:14We collect questions before each and every podcast.
42:17So, be a member.
42:19Get your questions asked.
42:20Jay, you've been awesome with your time.
42:22I love chatting with you, and I'm so happy that you're going to be a recurring part of this podcast.
42:27But today, before we get out of here, any final parting thoughts to the audience?
42:33The camera, as they say, is yours.
42:35This camera, that camera.
42:36I don't know where my cameras are.
42:38But deep breaths, the headlines are still going to be volatile.
42:42This time, we'll give many trading opportunities.
42:46But you have to be on top of your trades now.
42:49Take 20% swings in three days.
42:52These are not normal.
42:53But the long-term investor, Grin and Barrett, cost average in.
42:58My 24-year-old was complaining his 401k was down money.
43:01You're 24 years old.
43:02Yeah, be quiet.
43:03Keep putting money into it.
43:04Because my 50-year-old self thanks my 20-year-old self for living through 2000 or 2009 and continually putting money into the index.
43:12Always, always, always.
43:12Because over time, America will win.
43:14The indexes will win out.
43:15And this is a turbulent time, but this too will pass.
43:18Excellent, excellent.
43:19All right, folks.
43:20That is this week's podcast.
43:22We'll see you next time.
43:23But between now and then, be sure to check out a lot more of the smart content from Doug Cass, Helene Meisler, Sarge Guilfoyle, Ed Ponzi, RevShark, and many others.
43:34At the street pro.
43:35Thanks for watching.