00:10and welcome this is Mary Ellen micle
00:13here with your Friday afternoon mm Edge
00:17show as always the show where we bring
00:19you where the action is in the broader
00:23markets of very interesting week last
00:26week we did see the broader markets
00:28mostly flat but beneath the surface lots
00:31of activity that we're going to talk
00:32about let's first take a look at some of
00:34those headline news that drove price
00:36action last week and a lot of the
00:38economic data that is coming forward for
00:40the month of May is showing a bit of
00:43slowing in the economy first up we got
00:46consumer confidence that dipped in May
00:49from there we did see new home sales
00:51drop to their lowest level since
00:53November due to those High mortgage
00:55rates q1 GDP it did get revised again
01:00and it did show weak consumer spending
01:04and it came in below estimates beyond
01:06that we did see durable goods orders
01:08coming in they did show continued
01:11weakness in the manufacturing area so
01:14the markets are really seemingly trying
01:16to make sense of all this because
01:18normally this weakening economy is good
01:22in the sense that interest rates would
01:24decline that's what the Federal Reserve
01:26is on the lookout for however we did see
01:28rates tick up a a bit most importantly
01:31this week was today's pce data that's
01:34that core inflation number that the
01:37Federal Reserve looks very closely at
01:39and it did show that inflation is in
01:42fact slowly resolving itself but at the
01:46end of the day the markets were mixed so
01:49let's go ahead and take a look at the
01:50S&P and other areas of the markets and
01:53see where did we close for the week and
01:55here we are with a daily price chart of
01:58the S&P 500 as mentioned we did end the
02:01week flat just below this key 10day
02:03simple moving average of note is that we
02:06did have a bit of a reversal day where
02:09we were positive for part of today's
02:11price action and we closed in negative
02:14territory on pretty big volume not
02:17concerning at this time we do still have
02:19a positive RSI and macd however as
02:22mentioned a lot taking place beneath the
02:25surface that we will get into I did want
02:27to mention also that next week June
02:32FC meeting notes will be released always
02:37very very fed oriented with those
02:39numbers so you're going to want to be on
02:41the watch out for that during next
02:43week's shortened holiday period so let's
02:46go ahead be on the S&P 500 take a look
02:49at those 11 underlying sectors I have it
02:52sorted by that relative strength
02:54indicator as always we're on the lookout
02:57for potential rotation with your
03:00stronger sectors up here in this upper
03:02left cortile and then weaker areas down
03:05in the lower right area this past week
03:08only two sectors outperformed the
03:11broader markets first up we did see
03:181.5% for the week and as you can see
03:23despite that rally we are still beneath
03:25that key 50-day simple moving average so
03:28not quite in bullish territory there the
03:30other sector xlc is that communication
03:33Services sector and that sector was
03:36really benefited and helped by a nice
03:40rally in meta platforms and also Google
03:44both up more than the broader markets
03:46and you can see that nice uptrend
03:48remaining in that communication Services
03:51area also taking a look at some of these
03:53other sectors technology was down about
03:57a half of a percent last week you can
03:59see where it did attempt to Rally back
04:02above that key 10-day simple moving
04:04average but this area also experienced
04:07that negative Candlestick price action
04:10into today's close you can see that the
04:13appetite for some of those Tech areas
04:15did recede a bit as the week Advanced
04:19and then one other area that had looked
04:21promising last week this is the
04:23industrial xli sector and it did lose
04:27its luster a bit down about
04:301.2% we'll get into some of those
04:32reasons for the shifts in these
04:35particular areas but from here I did
04:38want to drill down further as always we
04:40want to move Beyond these sectors take a
04:42look at those sub industry groupings and
04:44there this is where the action was this
04:47past week first up here igv this is that
04:542.6% nice rally continuing here I'm
04:57going to share with you some of the them
05:00within software as always you really
05:02want to refine your investing as much as
05:05you can get that sector that Industry
05:07Group and then sub Industry Group before
05:10putting your money to work as always
05:12there are going to be areas of strength
05:14and the strength is there for a long a
05:17good reason most often it is because
05:20underlying companies are experiencing
05:22demand for their products so as we move
05:25through we can see the broader indexes
05:27up here at the Forefront but take a look
05:323.7% we are back in an uptrend now I
05:36will say this uptrend does have a little
05:38bit of a different feel a lot of the
05:41move did take shape today 3.1% we do now
05:45have a positive RSI positive macd
05:47crossover we're not quite up in positive
05:50territory one of the reasons for a
05:52movement into these Bank stocks is that
05:55the FDIC their stress tests did come out
05:59positive with certainly the larger banks
06:02that they monitor and I'm also going to
06:04share with you a couple of names in this
06:06area when Bank stocks do get going they
06:10really can advance for a length of time
06:13and you will want to be in those
06:14leadership names this is the move coming
06:17out of that 20 bear uh those leadership
06:20names are going to be first out of the
06:22gate that's typically what takes shape
06:24when a group comes back into favor so
06:26you want to be aware of that and with
06:29technology one area that did suffer is
06:33semiconductors and they were down over
06:361% we can see that this is hovering here
06:40at that 21-day simple moving average but
06:42we do still have positive momentum in
06:46the overall semiconductor group I will
06:49share with you why this area was weak
06:52last week and certainly nvidia's
06:54pullback down about 2% is certainly part
06:58of that but let's take a look at some of
07:00these other areas xrt this is the retail
07:03ETF down about 1 and a half% we talked
07:06about consumer spending consumer
07:08confidence weakening but I will share
07:10with you one of the primary reasons for
07:12that Retail Group suffering here so
07:15let's Jump Right In last week we did
07:19have several well-known companies report
07:21their earnings and I'm highlighting this
07:23because we are two weeks away from
07:25earnings season starting up again so
07:28let's take a look at one of the main
07:30drivers of weakness in the retail and
07:33consumer discretionary sector overall
07:36and that is Nike down
07:3920% the company not only came out with
07:42weak earnings they guide it lower this
07:44is all about China they had great
07:48expansion in that area it is what drove
07:50Nike higher in the past just going to
07:54pull up a monthly chart here and share
07:58with you some of these periods of growth
08:01duee to that China activity but
08:03unfortunately it is now reversing China
08:06in a bit of economic distress so we can
08:09see that the impact there what I wanted
08:12to point out is something that happens
08:14very frequently during earning season
08:17when you have certainly bellweather
08:18names reporting you will see addon plays
08:22if I may and that is when other
08:25companies that are in that same Industry
08:28Group also pull back sharply now this
08:32one already this is Bergen stock BK it
08:35already dropped but it is exhibiting
08:37weakness but there were other Footwear
08:41related stocks that pulled back in
08:43tandem with that last week also we did
08:46get earnings reports from CCL that is
08:50the Carnival Cruise Line Take a Look Gap
08:53up into a nice uptrend here we have this
08:56black line up through the red Mac D
08:58crossover that still has quite a bit of
09:00possible upside there we also get very
09:04good volume on that Gap up into the base
09:06breakout this is pretty classic what you
09:09want to be on the lookout for as we
09:10enter into earning season coming up
09:13again in about two weeks but again we
09:15did see that addon play where other
09:18companies that are not due to report
09:21their earnings quite yet but they are
09:24moving in tandem simply because if
09:27Carnival is doing well Norwegian Cruise
09:29Line should also be fairing well and
09:32then on that negative side relative to
09:34earnings Micron Technology mu and they
09:38this is a company that last week had
09:40faltered with this drop in some of these
09:42leading Tech names but this name also
09:45gapped down they gave guidance that was
09:48really in line but it did not impress
09:51Wall Street and you can see this gap
09:53down very big volume we're now down
09:55below this key 21 a day simple moving
09:57average with negative r SII and in turn
10:01we did see a number of semiconductor
10:04stocks pull back now the reason I'm
10:06pointing that out is again to have you
10:09tuning into that concept as we head into
10:12earnings season now I did talk about
10:15software stocks moving higher and then
10:18Bank stocks moving higher as well so I'm
10:21going to share with you a couple of two
10:24names in particular that are in the
10:26software space and they service the
10:29banking industry and most importantly
10:31they have constructive charts this is Q2
10:34Holdings qwo we can see we had this
10:38pullback this was in line with the
10:41pullback in the overall semic uh
10:43software group but we can see over the
10:46last 5 days we've Advanced back above
10:49this 50-day simple moving average we
10:52also have a positive RSI and take a look
10:55that macd just crossing we're going to
10:57want to get that into positive territory
11:00and we could potentially see further
11:02upside something that I really look at
11:04when I'm looking for Town trend
11:06reversals is I want to see that the
11:08company has a historical precedence of
11:11generally outperforming this implies
11:14strong management and strong potential
11:16growth prospects and this stock does
11:19have that and then another company that
11:21is in this software Financial space is
11:24aamai Al KT a little more advanced as
11:28far as that downtrend reversal but take
11:30a look at the high volume as the stock
11:33Advanced above each of these key moving
11:36averages we can see that black line up
11:37through the red macd in positive
11:40territory with that RSI now as always
11:43you don't want to chase the stock I'm
11:46just going to add a 5day simple moving
11:50average and that then becomes your guide
11:55because the stock really is exhibiting
11:57high momentum and then all also high
12:00volume characteristics and pullbacks to
12:03that 5day then become an ideal by point
12:07I talked about other areas in the
12:09software space and there really are
12:12themes that have it been advancing
12:16particular areas and this past week the
12:19biggest movers and certainly having the
12:22most constructive charts were software
12:24names that are involved in software
12:27security there was a period where the
12:30thinking was that spending among it
12:33managers was going to Ai and away from
12:37these security areas against cyber
12:40attacks but that need is still there and
12:43there's an even more refined theme
12:46beyond that uh several of the names that
12:48I'll be sharing with you are each
12:51involved with the US government so
12:54they're going to not be quite as
12:55dependent on any economic slowdown for
12:58their growth so here we are with poo
13:00Alto P NW you can see that nice Gap up
13:05into a base breakout nice bullish
13:08characteristics with this particular
13:10name also from here looking at a couple
13:14of potential cup with handle base
13:17breakouts now this is a formation that's
13:20not very common and when it does take
13:22place it is worth taking note it is when
13:26a stock hits a new high has a a pullback
13:30and then forms a handle about a little
13:34more than halfway above that receding
13:36period and then breaks out of this back
13:39and fill handle period which we saw
13:41today this is Autodesk a
13:46dsk another software name that we can
13:49also look at and you will see a bit of
13:51sloppy price action in these software
13:54names because of the pullback now this
13:57is during the rising interest rate
13:59environment that we did see a number of
14:01these software names pull back so be
14:03aware if you're tempted to nibble on
14:06particular names that next week we will
14:08have that inflation oriented data due to
14:11be released but with AI again that new
14:14high and price pull back in this case
14:17we're about a third below this prior
14:19high and then we form that handle
14:22formation looking for a breakout at that
14:2533 level for a possible
14:30cup with handle base breakout another
14:33company that is on my radar quite simply
14:36because very very strong growth
14:38prospects this is K D you can see this
14:42is a gap up on earnings and other
14:44software security and a real leadership
14:48name in this space the company is on
14:521,500% growth this year versus last year
14:56so if we take a look at that Gap up and
14:58then a nice continuation rally the stock
15:01pulled back very orderly and is now in
15:04the beginning stages of trending back
15:07into a nice uptrend with that RSI in
15:11positive territory on the lookout for
15:14that macd to also post that nice
15:18downtrend reversal black line up through
15:21the red and last up here we're going to
15:23take a look I shared with you
15:26KR and often times these smaller banks
15:30are going to be quite small but there
15:32are Regional banks that also qualify in
15:36this Regional banking ETF that are
15:38larger that I tend to favor uh also I
15:42did want to point out with this move
15:44into Banks we did see small cap stocks
15:47outperform last week as you may know
15:5124% of the names in the Russell 2000 and
15:55that number may have dropped given the
15:57decline in banking stocks but is in this
16:00small cap Russell you can see that we're
16:02now in a new uptrend there so from here
16:05I'm going to share with you a couple of
16:07names that fared well last week and
16:10these are stocks that I am very familiar
16:13with because they were big winners for
16:16my em Edge report during that 21 period
16:19rally in these Bank stocks and this is
16:22CMA co- America big Advance today 6.7%
16:26this was all about news regarding a
16:29possible fraud suit that's been
16:31dismissed so it is news driven but
16:34certainly of note here another larger
16:37Regional Bank stock that also had a very
16:40significant day today this is Regions
16:43Financial RF and today's Advance did
16:47push the stock right on the cusp of a
16:49base breakout that macd just now getting
16:52into positive territory last up here I
16:55am going to share with you what is
16:58shaping up in some of these bigger Money
17:00Center Banks and here we are with City
17:02Group C is the ticker and I'm
17:05highlighting this as well as one other
17:07name because they are due to release
17:10their earnings in two weeks from today
17:13you can see this bullish move higher
17:16going into earnings quite constructive
17:19and we can also see historically that
17:21the stock really has that capability to
17:23outperform one other name that is also
17:26due to report on the same name day is JP
17:30Morgan and here we are you can see that
17:33it is now back in a confirmed uptrend
17:36and looking really quite interesting and
17:39that's it for this week everyone have a
17:42fantastic weekend have a safe 4th of
17:45July I'm going to look for you here
