A Technical Analysis of the Stock Market
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This is Barron's Live. Each week, we bring you live conversations from our newsrooms about what's moving the market right now. On this podcast, we take you inside those conversations, the stories, the ideas, and the stocks to watch so you can invest smarter. Now, let's dial in.

Hello, everyone, and welcome to Barron's Live, our weekly webcast and podcast. I'm Lauren Rudland, Senior Managing Editor at Barron's. Thanks for joining us today for a market update and a look at stocks in the news. My guests are Barron's Deputy Editor, Ben Levison, and Katie Stockton, Founder and Managing Partner of Fairlead Strategies, an independent research firm and investment advisor,

focused on technical analysis. Katie is also the manager of the Fairleague Tactical Sector ETF. The ticker is T-A-C-K or TAC. It

It was launched in March 2022. We spend a lot of time on Barron's Live discussing the fundamental factors driving stocks. But with markets misbehaving lately, Ben and I wanted to get a technical reading on the charts. So, Katie, we have a lot of questions for you. I'm glad to be here. Great. I was going to say thank you for joining us today on Barron's Live. I am so glad to have both of you on this call. Same here, Lauren. Glad to be here.

All right. So, Katie, as I hinted, it has been a winter of discontent on Wall Street. The Nasdaq Composite has given up its gains for the year, and the Dow Industrials and S&P have been selling off, though they're still marginally positive for the year. The big question we're asking ourselves and anyone else who crosses our path is, how should investors react at this moment? Is this going to be a buying opportunity, or is it a good time to get out? So...

Given that, I'd like you to look at the charts of the S&P, the NASDAQ and the Dow if you want to and tell me what they're telling you. The answer might be neither in terms of a buying or selling opportunity. And I think that's the frustrating takeaway that we have right now from the market in that it's been range bound.

So a trading range has really a neutral takeaway to it. And trading ranges tend to be among the most frustrating market environments because there's no trend to really leverage. So we feel that because this trading range or consolidation phase is following a prolonged uptrend,

it is more likely to be distributive. We've certainly seen that in plain English, that it's characterized by selling pressure. That's overwhelming or overwhelming the buying pressure. So that means the sellers are more likely to win out and, you know, we'll see some kind of downdraft on the back of this consolidation phase. That would be the takeaway there.

And that takeaway is derived from our price momentum indicators. We have indicators that track price trend and measure whether that trend still has momentum or has any oomph to it. And of course, we've seen this uptrend as of late 2024 lose some of that oomph. And we think it's going to be prolonged. We think that we'll see several months even of this kind of choppy behavior in

That doesn't allow for investors to assert a long-term directional bias with any real success. Is it too soon to know?

Where we'll be after this phase? Will we be primed for another rally or will it lead to more selling? Yeah, I mean, as technicians, we always assume that the prevailing trends over different time frames will uphold themselves. And so the assumption that we're working under is that the secular bull trend that the market has obviously been in looking at any of the major indices on a monthly bar chart will ultimately resume eventually.

So we're seeing this corrective phase, if you will, or this trading range environment as something that should ultimately refresh that uptrend. It allows for investors to feel like they're getting a better deal on individual stocks that had gotten overextended towards the end of 2014.

And ultimately, it will allow for those buyers to step back in with some confidence. But we don't think we're close to that right now. So we don't think there is a buying opportunity at hand that has any duration to it. We are looking for a short-term bounce in our work, but something that might be fleeting, just given that weekend, intermediate, and long-term momentum picture. So it sounds to me like we're in a wait-and-see mode, which, as you say, is the most frustrating part.

I think so, because usually within the ranges, we get these volatile moves on a short-term basis. And we've already seen that manifest itself in the S&P 500. If you look at a daily bar chart, going back all the way to the election, there's just been a lot of chop up and down. And for those that are trying to leverage that, they have to be incredibly nimble and very, very close to the market using very short-term indicators, perhaps from a technical perspective, which

or having a real handle on what the fundamental news may be. So it's a very difficult environment for most people. And those long-term investors are probably well served just to temporarily reduce some partial exposure and just live through it rather than trying to be especially active in this type of environment.

So before we go on to talk about different stocks, I wanted to ask what technical tool is most useful to you at a time like this? We have a collection of indicators that we're using, and that's both for our research and also for our ETF TAC. The indicators I would classify three ways are momentum gauges, which could be synonymous with trend following measures, and

We're using also overbought, oversold metrics. So those are trying to understand whether the trend is maturing over different timeframes. And then finally, we're using relative strength analysis. So that usually looks like a ratio, a price to price ratio, something like,

the semiconductor sector ETF divided by the S&P 500 ETF, just to understand where the relative performance is coming from and applying the same trend following and overbought oversold metrics to those ratios to get a good takeaway. So it's a combination of indicators that we really depend on. But if I were to highlight one for novice investors to start with, I really like the MAC indicator that stands for Moving Average Convergence Divergence.

And it is, as you can tell, derived from moving averages of price. And it will therein have an inherent lag to it. But it's a great way to isolate prevailing trends over different time frames and to understand when they have shifted in terms of their momentum. Okay, good explanations. Yeah, speaking of momentum, I mean, so many momentum stocks have really gotten washed out, it feels like, in this trading range.

But I was curious, how do you decide when a stock that has that strong trend is worth chasing and when it's actually time to take profits on it? It's often been using those overbought, oversold metrics. And there's a lot of them out there. We use two of them.

We use the stochastic oscillator and we use something called the DeMarc indicators. Tom DeMarc has a suite of indicators that we depend upon to understand trend exhaustion. For us, those are our two go-tos to try to understand one, if something's overdone.

And two, if there's a good entry, perhaps that hint. A lot of it comes from reconciling the timeframe. So for those momentum factor stocks, Ben, that you mentioned, their pullback, of course, was really pronounced. And it did generate a pretty quick short-term oversold reading based on those metrics. The pullback was preceded, though, by an intermediate-term overbought downturn. So the intermediate-term gauges, which we're usually taking from a weekly bar chart,

are still pointing lower, whereas the short-term gauges are pointing higher on the daily chart. So it can tell you, okay, well, we might have a brief bounce here. Some people might be inclined to try to trade that.

But the risk is still a little bit greater to the downside over the coming weeks, as indicated by the intermediate term metrics. So it becomes a bit of a dance between the timeframes. And if I'm, let's say, a longer term investor who might think, you know what, I have a little too much of X stock, then if I get that bounce, would that

Kind of be the opportunity then to take some profits or to lighten up just a little bit. That is actually our messaging right now. We feel that the loss of intermediate term momentum is significant enough to warrant using an oversold bounce to reduce some exposure. And when we say some, it's different for everyone what's appropriate, but some kind of risk management we think should be in place probably even for much of this year, meaning maybe if somebody had a 75% equity

exposure, they bring it down to 50 or something of that nature. It's really going to be different depending on people's risk tolerance and overall portfolio. But we do think some reduction in exposure is appropriate. And it's always nice to have a bounce to make you feel better about doing that. So Katie, Ben and I thought it might be fun

to take a look at the MAG7 stocks. I recognize this might take the entire call and it might take next call as well and the one after, but we'll try to consolidate things. And what we wanted to do first was look at the Roundhill Magnificent 7 ETF, the ticker is MAGS,

It tracks the performance of the seven stocks that have more or less led the market higher over the past two years. And these stocks are all in some way beneficiaries of the AI trade or perpetrators of the AI industry, so to speak.

Can you take a look first at the overall MAGS index and then go through each of the seven stocks and give us a sense of their technical setup, whether they look like buys, sells, or holds? Yeah, we can. And we do this often. Lauren, this is something that we get a lot of questions about, as you can imagine. And in fact, we did highlight MAGS in this morning's research because it's so interesting to

we've seen about 6% downside year to date. So just for 2025 in the MAGS ETF. And that's, of course, a big departure from the outperformance that had characterized that ETF. And they're in the MAGS 7 stocks for much of 2024. So our messaging has been that

there's been sort of that upside leadership has been relinquished by the MAG7 stocks. And we do think it's meaningful. The ratio there, MAGs to the S&P 500, has a major correction in place. And it's a correction that might see a little respite if we get a bounce in here as expected. But it's a loss of momentum that's meaningful and could sort of carry with the market here for a few months and be part and parcel with a trading range or sort of gradual downtrending cycle.

So we do think it's significant. We don't have any intermediate term buy signals yet for the mags. And that means that it probably will take longer to get to a place where we have confidence in a reentry for a lot of these names that have pulled back or corrected within their uptrends.

And most of them still are very much solidly in long-term uptrends. That includes the MAG ETFs itself. It's just that the monthly indicators that we're tracking, things like that monthly stochastic oscillator have increased.

collectively rolled over. And that means we're in for at least a less steep uptrend, broadly speaking, in that space. So we think it's significant. But, you know, looking out a year from now, it could be something that does refresh these uptrends. I don't know if that's it's representing fatigue with the AI trade, perhaps, or just valuations reaching a certain level. But the charts definitely suggest that it's meaningful.

And I think we have to start with Microsoft as really one of the culprits for that underperformance of late. We had underperformance actually for much of 24 for Microsoft. So that differentiates it negatively already. But then with an acceleration to the downside in February, we have a relative breakdown. And it's still it's not without support, but you've heard of a head and shoulders top formation, I'm sure. And Microsoft has the shape of just that.

So we feel that that's a bearish longer term setup, you know, to pull out of those Mag 7 names. Katie, do you think that it looks like Microsoft has support around 390 or so? Did you expect that to break? Yeah.

Yeah, we see that same support 389 to 390. It is a pretty key level based on a couple of our metrics. We follow the previous lows and then also something called the cloud model, which is right there. So it's a strong support level. And we do think it's at risk of breaking just based on the fact that the monthly MACD is negative, that weekly MACD is negative, that we're not

quite at long-term oversold territory yet. So taken together, that would suggest that maybe after a little bit of a bounce, we'll get a breakdown.

All right, so let's look at the others very quickly. I want to start with NVIDIA since it's been in the news. NVIDIA has entered a consolidation phase. That's nothing new. And it was part and parcel with the trading range developing in the S&P 500 in November. So we're seeing it as something that could be constructive longer term, but it's taken enough of a toll on its monthly indicators to suggest that it will be a trading range environment at

best for NVIDIA for much of this year. There's one of those DeMarc cell signals that's from a few months ago that is still active and has implications for another six months or so of sideways to lower action for NVIDIA. And it

To add on to that, we have an overbought downturn that's long-term in nature. So we do think that this is maybe not the start of something, but we're sort of not even to the fourth inning potentially here. So looking for more of the same from NVIDIA, there is some good support around 110 on the chart. We don't have any short-term buy signals or anything else to suggest that we have even a short-term entry at this time.

Let's move on to Apple. What do you see there? Apple has also seen a corrective phase within its long-term uptrend. And here, too, we have some signs of potential long-term exhaustion, but they're not quite as pronounced or obvious as the ones for NVIDIA. So just sort of a new downturn on the monthly chart that we've got our eye on. The shorter-term gauges I would describe as neutral at this time. So

It's not the highest risk of the MAG7, in my opinion, with the neutral indications from the daily and some of the weekly indicators as well. But you also don't see much of a positive catalyst for the stock at this time. So we would be looking for intermediate-term oversold readings, probably occurring even below that 200-day moving average, which is initial support around 226. What's the best of the bunch among these seven?

I would say right now, from a technical perspective, Meta still stands out as one of the best of the best, despite that momentum factor pullback that it just underwent. And in fact, that pullback might be a short term opportunity with minor support around six, six fifty. That's based in part on the 50 day moving average.

Meta is one that has avoided any long-term sell signals. So while we have a loss of intermediate-term momentum, that's somewhat notable but not too bearish. We don't have any issues on the monthly chart of meta at this time. So I think if I was a holder, I would simply hold on through the consolidation and acknowledge that this one's a long-term outperformer and has really held up relatively well.

So that leaves us three more, Katie. Alphabet, Amazon, and the one we're all very interested in, Tesla. For...

alphabet it's a corrective phase this is probably the third question i've gotten on it today so it is it is topical yeah um so with the correction we've seen downside followed through to some support which is defining the longer term uptrend and it's it's newly oversold but i think it will take time based on the monthly metrics which have shown deterioration like most of the others

So we think that, you know, we could see a bit of a bounce here as well. Might think about using that to reduce exposure temporarily because there is risk that Alphabet is getting into a bit of a range. One thing I will say that differentiates this stock is that the ratio to the S&P 500 has a counter trend buy signal, meaning that the underperformance that we saw in February is a little bit overdone.

So at least we shouldn't see big underperformance necessarily near term from Alphabet. For Amazon here, too, of course, we've seen a pullback as sort of the momentum factor pullback has impacted this stock as well, taking it below some short term support.

For those that are just getting started in technicals, you can look at the 50-day moving average for Amazon and see that it's rolled over. And that's something that represents the intermediate term uptrend losing momentum. There, too, on Amazon is one of those countertrend sell signals from the DeMarc indicators on the monthly chart.

And that tells us that the stock is probably entering more of a range bound environment. Maybe it's more gradual uptrending environment. So I think it's going to be more difficult to take advantage of the upside in Amazon and that if it's a new investor, they might just wait until the setup is more favorable and there's some kind of positive technical catalyst to speak of. Next support for Amazon is at the 200 day moving average in our work, and that's around 199.

And Lauren, we'll, I guess, wrap up on Tesla for the Mag 7. And Tesla is, of course, very topical as well in that it's had a very significant corrective phase after a big breakout.

So you had to zoom out on this one on the monthly bar chart. You can see it the best where we had a major breakout following a higher low. So we do respect that long term breakout. So despite the dramatic retracement from nearly 500 down to below 300 here, but.

It came right into the 200-day moving average, currently at 279, and now is oversold from an intermediate term perspective. We don't have a decisive buy signal yet in our indicators. That would mean something from those to mark indicators or perhaps an upturn in the stochastics. But we could get that pretty quickly within a couple weeks based on some of our metrics. And there is support basically in line not only based on the 200-day moving

but also some former resistance on the chart. So we're intrigued by Tesla, would probably wait for a more decisive upturn, but compelled by that long-term breakout as well.

Katie, that's a great rendition. I'm glad there are only seven or we would be talking for hours. So now I want to flip the conversation and turn to Ben and ask about some fundamental things. Then we'll get back to listener questions. We have a lot of technical analysis questions from our listeners. Ben, I want to talk about the economy for a minute, and then we'll go on to some companies reporting earnings this week.

We've had a number of negative readings on the economy in the past week or so, two consumer confidence or sentiment readings that were deeply negative. We had a negative reading on savings and outlays. And somewhat shockingly late last week, the Atlanta Fed's GDP Now tracker of incoming economic data flipped to a negative number from a reading of more than 2% for the first quarter.

We're talking about GDP growth. It's now indicating that GDP is on pace to shrink by 2.8 percent for the first quarter. I guess the question is, how worried should we be about this economic outlook? And what are you hearing from people you talk to on the streets?

Well, you should be a little worried about it. But one thing to remember about Atlanta Fed GDP now is that it is a tracker. It's not a forecast. So a number comes in from first quarter data. Most of it's been from January. And it updates, you know, given that this given this piece of data, this is what GDP would look like.

And it's pretty bad right now. I mean, last week was terrible. We had Chicago Fed National Activity Index, the Dallas Fed Index, Consumer Confidence, new and pending home sales, and initial jobless kinds all came in weak. And then just this morning, the ISM Manufacturing Index also came in weaker than expected, though it was still over 50. And construction spending was also weak.

And so you put all this together and you get a city has an economic surprise index, which keeps track of how much these numbers are either beating or missing by. They're missing by a lot. It's negative 16.5 right now. It's the worst in quite a while and just tells you that we've had a slate of really disappointing data.

I was reading some Ed Yardeni notes about what to expect here, and he's actually not worried. He thinks that most of this soft patch was caused by January's ice, the cold weather, which he says was the coldest since 1988. And he thinks that you could actually get a bounce back in February.

We'll get the first February number really of import on Friday when we get the non-farm payrolls number for last month. It's expected to come in at one hundred fifty eight thousand. If we actually get we could get a better than expected number there that might alleviate some of the alleviate some of that worry about the economy and a potential slowdown down there.

That's interesting because I know Ed is on Long Island. I didn't think it was that cold. Apparently it was. Katie, let me ask you a question. Do you ever apply technical analysis to economic data? We do, but more just for fun, to be honest, because it tends to be somewhat low frequency, meaning it's monthly data points or quarterly data points.

And that to us is a little bit insensitive, right, to the short-term and the intermediate-term swings that we're trying to navigate at times. But

But for long term takeaways, it can be really informational. We love especially applying the DeMarc indicators to things like national mortgage rates, because aren't we all curious as to whether those are peaking? So we do that. But really, just more as a point of interest. And how much credence do you put into, you know, I keep reading a lot about how consumer staples are outperforming consumer discretionary, and that's a sign of potential economic weakness. How much credence do you put in that?

So we do actually look for defensive sectors typically to outperform in weaker environments, especially if yields are trending lower as well. And so the outperformance of late from staples is pretty important to us right now. We have a position.

In our ETF, we still hold discretionary as well. But the relief rally and the relative performance there is meaningful in our rotational work. So we have normalized ways of looking at sector rotation. And it favors not only consumer staples, but also utilities.

and real estate and healthcare to a lesser degree. So we do think that this is more of a defensive year on the sector front in terms of relative performance versus the S&P 500. And it's certainly a valid comparison to throw a ratio of staples to discretionary to try to get a read on market sentiment and how consumers are feeling.

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Speaking of how consumers are feeling, Ben, let's take a look at some earnings this week, and then we'll go to some listener questions. We're going to hear from two major U.S. retailers, Target and Costco. Target reports tomorrow. Costco reports on Thursday. Let's start with Target, which has definitely struggled of late. The stock is down about 20% over the past 12 months. What's the outlook? Yeah.

Yeah, it's kind of amazing looking at these two targets down 20 percent. Cost goes up 40 percent over the past 12 months. You know, Bank of America is looking at this actually positive on target. They think that the fourth quarter was very strong and that they're going to actually be able to either meet or beat their raised forecast of one point five percent for same store sales.

But they also are worried that there are signs of an early deceleration in 2025. And that could be a problem. But they are working to, you know, this has been a company that's really been trying to get its act together for quite a while now. If they can get their margins to, you know, get rid of some of the pressure on their margins.

and keep building out these growth initiatives. They keep announcing new things like they have a Disney and Marvel collection under the Pillow Fort brand. They're bringing Warby Parker Shop and Shops into the store. They're doing all these things that hopefully can offset some of these other pressures that are going on. So, you know, Bank of America likes the stock. They have a

buy rating on it. And they expect that, you know, they said the valuation is attractive. You know, it's down at about 13.3 right now, which is pretty low. This is about the lowest level for, you know, over the last 10 years. This is kind of where it bottoms out. So, you know, they're pretty, pretty big fan of it. But it's one where I look at it, I just worry, you know, it's we've had these moments where it looks like it's going to turn around and then it gets smacked again. It'll be an interesting one to watch.

Especially we have to watch the stock and the company, and we have to watch what's happening with the consumer at this point. Absolutely. We didn't have to pay much attention to last year. Tell us a little bit about Costco. Well,

Well, Costco has been the opposite. I mean, this is a stock that everybody loves. And if Target is cheap, Costco is anything but. The last I looked, though, it's around 55 times 12 months forward, which is a pretty amazing number for a retailer that's more, you know, it doesn't grow super fast. It just grows very steady. And people love it. You know, they see it taking market share. They see it being able

to uh you know it has the strongest um uh return on its uh real estate so you know it basically get makes more money per square foot than pretty much anyone else and people love this about the stock and but it's getting priced now you know you look at things uh bmo is still one of their favorites they have an outperform rating they have a price target of 1 175 that's based on 60 to 61 times there's 26 six earnings per share

So some of this starts to feel like it's getting a little bit silly, especially because you can buy NVIDIA, which, as Katie has said, it's been stuck in place for a long time, but it trades for about half that valuation. But, you know, until people start saying until something goes wrong here, it's hard to see what's going to knock the stock down. And people have been making the valuation argument about Costco for a very, very, very long time. And it keeps getting more expensive and it just keeps going.

up. And that may happen again. It'll be an interesting week. Let's talk about two tech stocks while we're at it. Broadcom reports on Thursday and we have Marvell reporting on Wednesday. What is the outlook for these companies? Yeah, I mean, these are going to be important to watch because they're big beneficiaries of the AI trade, though they've had different performance recently. You know, Broadcom has been an absolute killer. It's up 23 percent over the last three months, 43 percent

over the last 12. It's expected to report a profit of $1.51. That would be up from $1.10. So that's quite a bit of earnings growth there. But a lot of this is going to come down to Broadcom being able to continue to make the argument that its AI business is going to keep growing. Its three biggest customers are Google, Meta, and ByteDance. ByteDance is the parent of TikTok.

That's always a bit of a risk there in the background. And there's also some concerns just because they are, Apple's a big customer and Apple's sales of new phones hasn't been all that great, but there are people feeling very good about this. I was reading an Oppenheimer note, they have an outperform rating and a $225 target. And it's one that as chips go, if Nvidia is kind of stuck in this sideways pattern,

Broadcom had been doing a bit better, but that it's been pulling back recently just on these AI concerns. Marvell has not been doing as well. It also does chips for many of these AI players, but it's pulled back quite a bit more recently. It's actually dropped down to its 200 day moving average.

You know, they're expected to see earnings growth from to fifty nine cents from forty six cents. And their guidance is hopefully good. I mean, so much depends on Google and Microsoft, Meta and Amazon continuing to build out those data centers.

So, again, it's all about the AI trade. We need to see how what they're saying about that and whether it's really, you know, it's not as much about the earnings beating, but about the guidance and how, you know, basically saying whether these companies are going to keep building out their AI data centers and those capabilities. And they likely will. That seems to be the trend. That does seem to be the trend. For sure. All right. Let's go to some listener questions. We've got a lot of them coming in.

And the first one I'm going to put to Katie is from Michael. Michael notes that value has taken on leadership of late. And this is really evident in Europe outperforming the U.S. for the first time in like forever. I have to agree with Michael, like forever there. Do you see this as a sustainable trend or is this simply a reaction to the Mag7 continuing to correct?

You know, the outperformance Europe versus U.S., I think it's too early to call that a lasting reversal. The long term trend, of course, has favored the U.S. and it's still very much has a hold that that downtrend in the ratio, perhaps of the stock 600 index.

to the S&P 500 index, what we've seen is a really substantial relief rally, especially year to date. And that's, I think, you know, has everyone sort of perked up and listening to those markets.

We do have at the same time overbought indications for Europe in absolute terms. So we are looking for a pullback there, even as U.S. potentially bounces in here. So we think that the phase of outperformance will be sort of alleviate or fade in here.

And because of that, again, I think it's a bit too early to get excited about it. But if we do start to see something more out of the ratio, something that looks like a bottoming process, as opposed to just a relief rally, I'd say that that would be pretty intriguing because we haven't had sustained outperformance there in a long time. And that would argue that perhaps some of the valuations there are more attractive. So we're listening, we're watching, but I think it's too early to suggest it's lasting.

The ratios between growth and value are interesting, too. The long-term trends there aren't nearly as decisive as international versus U.S., but they're gradual trends that have favored growth. Within that context, we do have a phase of value outperformance underway.

It's still corrective. So it's still within the context of that long-term trend favoring growth. But we think it will continue. And we think it's more natural to see that value outperformance. And by the way, also more natural to see small and mid perform in line or slightly better than large caps in a corrective phase for the broader market. So it would be very much in following with what we expect.

in terms of more range-bound tape, where we see that sort of switching of hands. I wanted to ask about China. We had a cover story about Chinese stocks this past weekend. What do your indicators tell you about Chinese stocks? There appears to be a long-term basing phase in place for a lot of the China benchmarks, things like the Hang Seng Index or the

Shanghai Composite Index. We saw a big breakout there towards the start of the fourth quarter of last year, and we think it was meaningful. The catch is that think of China as almost high beta versus U.S., right? So when you see the retracements, they can be pretty dramatic. And

And we don't really want to be there for those retracements because they tend to be associated with sharp underperformance versus U.S. when that happens. So we want to see a little bit more proof that there's an important low in place that would probably require a retracement and a higher low for us for these indices. So we don't think it's a timely entry right here, right now. But we are on the lookout for that. And we think we will see that at some stage. Maybe it's closer to mid-year.

- Okay, I'm gonna put the next question to Ben. Elliot notes that tariffs kick in tomorrow. Are you expecting any economic shocks or has all of this been priced into the market? - I wish I knew the answer to that. It's one where I think the market is still expecting some sort of, or have been expecting some sort of deal announced and may still be.

you know, that at the last minute, just the way they have been before. You know, I think we should all worry about the short term impact of those of 25 percent tariffs if they're initiated. There are a lot of things that would get suddenly more expensive. I think businesses are worried about that. And that's been kind of showing up in some of the ISM and readings and things like that. So

I think we have to worry about it, and I'm not sure they're priced in. But again, we're in this range-bound market. So it's going to be interesting to see where the –

How the ranges get tested as these announcements come. I mean, so far, the market's been able to, you know, on the one hand, you can look at it as like they've weathered it all so far. No, they're holding up OK. On the other hand, they haven't been able to rally either. So I think we're going back to Katie's comment. There's probably a lot of very volatile range bound trading off of the tariff headlines. I think that makes a lot of sense.

Katie, we've had a question about silver and gold. I meant to ask you that earlier, but we got carried away on the MAG-7. What is the setup for gold, which has had a phenomenal year, and for its cousin silver? Yeah, it certainly has. So it's almost just as exciting as the MAG-7 stocks, for sure. So long-term upside momentum there, of course, behind the price of gold and to silver to a lesser degree.

And the indicators still point higher. We don't have any long-term sell signals, but we do have some short to intermediate-term signs of upside exhaustion there supporting consolidation within that uptrend. So that's what we're looking for. Nothing to suggest that people need to reduce exposure, but probably somewhat limited upside for gold in the near term, giving these overbought indications that we have. The last breakout in the price of gold gave us a measured move projection of

which is something that just assumes the trajectory of the current uptrend will maintain itself of about 30, 60. So that's still substantial upside from here. So that's what we have our eyes on as an intermediate term objective. And we think of silver as really a higher beta version of gold in that when both are rallying, silver is often rallying harder and vice versa. The pullbacks can be a bit more dramatic, but,

Right now, silver has a short-term oversold indication near its 50-day. So it looks poised for a little bit of a bounce, after which we'd look for it to consolidate alongside gold before its next up leg. But there, too, we don't have any real decisive sell signals to highlight in silver. So we think that along with gold, that it's a great diversifying asset class precious metals.

and one that can provide safety and, you know, a more volatile equity environment. Now a technical question for our market technician. Vijay asks, how do you identify trade reversals from the charts? We have those overbought, oversold metrics to try to understand where there's reversals. The MACD also can do that.

What's nice about these technical indicators, especially if you're sort of mathematically inclined, are that they give you distinct takeaways, meaning a buy or a sell signal, like binary takeaways that helps take some of the gray area out of the price trend. So if you look at silver for one, there is an overbought downturn on one timeframe. So you could say, well, that's going to have

implications for a few weeks. And so there's a trend reversal, but you have to always make sure that you're aware of the timeframe that you're looking at. So I would say stochastic oscillator would be a great way to start and also combine it with the MACD to look for different crossovers.

Okay, another technical question. Riti asks, where do you see support for the S&P 500 if there were to be a correction? And alternatively, where would the rally top off if the S&P would have rallied? Yeah, so that's effectively the boundaries of the trading range that we've been talking about, drawn back to the post-election gap, which is what we're using as our first support level defining the range right around 5783.

The 200-day moving average is at 57.24 and rising, so it soon should bolster that support level, which again defines the bottom of the range. What we wouldn't want to see if we are bullish is a breakdown below 57.83. And for us, we always make sure that breakdowns are made decisive. So that would be a couple of weekly closes below that 57.83 to designate a breakdown. And on the upside, the up

boundary of the range, we can use the January high at this point, which is around 61.28, to gauge whether the S&P is breaking out using that same metric. Okay. I think that's something many of us were wondering. So glad to have that question. All right. Two more very quickly as we near the end of the call. Zachary asks about Rivian and Palantir.

Great. Yeah. So these are higher beta names, certainly, but definitely favored by traders because if you can time these swings right, you can really benefit from them. Rivian, for one, has come off its lows pretty dramatically as of the November lows were back around 10. The stock is trading right around 12 right now in this corrective phase. It's not quite oversold yet. So let's look at that as

this as a retest within its long-term basing phase that I wouldn't quite be convinced is over yet by our intermediate-term metrics. But from our short-term metrics, it looks like it could bounce maybe back up into the 50-day moving average, which is at 1326 at this time. And then, of course, Palantir is yet another one that's sort of a darling of traders where it has so much volatility and it's been

on such a good run up until very recently when it pulled back alongside the momentum factor names. For Palantir, we have both an active short-term cell signal and an active intermediate-term cell signal for our DMARC indicators that we use. And then next month, we have the potential to see one pop up on the monthly chart. So for us,

it's a better sell into a bounce for that reason. Okay. And last question, I believe it came from Larry who wanted to get your read on biotech. On biotech. Yeah. It's funny. We rarely ever get questions on biotech anymore and that's because it's been out of favor for so long, but eventually it should provide opportunity for,

The XBI ETF as a proxy has been in a cyclical down move. You could argue that it's within the scope of a long-term sort of basing phase. There is support not terribly far from current levels, not only at the January low, but based on our cloud model. And we do have an unconfirmed short-term buy signal. So this to me would be one to watch, one to see if it can hold strong.

in the mid 80s for XBI just to see if we have some support discovery before feeling confident that this cyclical down move is over.

Okay. Katie, I wish we could keep you around all day. Thank you. Ben too, who I'm lucky to work with all day. But that's the end of today's call. Thank you both for joining me. Thank you. I want to thank our listeners as well. Next week on Barron's, I will be back to talk about markets and stocks in the news. And our guest will be Paul Malloy, head of municipal investments at Vanguard.

During the course of a day, we could talk about technical analysis and munis in the same hour, in the same half hour even. And I kind of think of Barron's Live as an opportunity to listen in on some of these calls, hence the variety of guests. So this week we had technical analysis. Next week we're on to muni finance. Thanks, everyone, for tuning in today. Stay well and have a good week.