The TML Talk | February 19th, 2025

Market Overview

• Indexes and General Market Trend:
  • The NASDAQ finished just shy of its recent high, slightly weaker than the S&P but still showing resilience with leaders holding key levels.
  • The S&P 500 closed at a new all-time high this week, with higher volume supporting the breakout, signaling strong institutional participation.
  • The Dow Jones continues to perform well, with small caps and industrials lagging but showing signs of potential rotation as biotech and tech take a breather.
• Current Market Status:
  • The market is humming along at or near all-time highs, with healthy rotation across sectors like travel, technology, and financials driving broad participation.
  • Growth stocks remain dominant, with cybersecurity, software, and medical devices showing tight setups and strong fundamentals.
  • Earnings volatility persists, with stocks like $HIMS gapping up significantly, while others like $TWLO dip below key levels post-report, creating both risks and opportunities.
  • Market breadth is broadening, with patterns tightening across multiple groups, suggesting the uptrend could strengthen if volume confirms the moves.

Key Lessons & Quotes

• “I love when the market gives you a chance to see rotation in action—it’s like a treasure hunt across sectors. This week, we’re seeing travel, financials, even utilities perk up while tech holds steady. It’s not about one index winning; it’s about catching the wave wherever it’s breaking, whether that’s $RCL in cruises or $CEG in energy. That’s where the real edge lives—staying flexible and following the strength.”
• “Volatility’s been shaking me around lately, and I’ve had to shrink my positions to sit tight—it’s a humbling reminder. Take $TWLO dipping below the 50-day or $RKLB squatting on me the past few days; the market doesn’t care about your plans. You’ve got to respect that chop, build a cushion, and let the stock prove itself before you swing big. I’ve learned that lesson the hard way over 30 years—patience can save your year.”
• “Sometimes you miss a runner like $HIMS, and it stings, but nine times out of ten, waiting for a pullback pays off if the stock’s got a history of support to the left. I’d rather skip a trade than chase into the ether with no stop—like trying to catch a rocket with a butterfly net. The market’s full of opportunities every other day; there’s no rush when everything’s this healthy.”
• “I don’t lean on buy-stop limits myself—too rigid for my taste—but guys like Rai swear by them, nailing precise levels with options and Level II data. Me? I’m hitting the market live, decisive, and letting alerts guide me instead. It’s about control—whether it’s $ASAN at the 50-day or $IBM tightening up, I want to feel the pulse and react, not just set it and forget it. Trading’s an art of commitment, not a machine ticking boxes.”

Actionable Takeaways

• Follow the Rotation: Watch for shifts into small caps, industrials, or financials as tech and biotech pause—selling into strength and buying setups early can generate alpha.
• Wait for Logical Entries: Even in an uptrend, avoid chasing—look for pullbacks to support or tight consolidations with clear stops.
• Monitor Volume on Breakouts: A leader breaking out needs volume confirmation to sustain the move; don’t commit without it.
• Use Moving Averages Wisely: Stocks respecting the 10-day, 21-day, or 50-day offer defined risk levels—give them room to wiggle but set stops below key averages.
• Adjust Sizing with Volatility: In a choppy market, reduce position sizes to build a cushion, letting you sit through swings without panic.

Stock Mentions and Commentary

Information Technology – Software & Cybersecurity:

• $ASAN: Pulling back to the 50-day with confluence of 21-day and 23-day EMAs; actionable on weakness if it holds support with volume.
• $ASTS: Weekly and monthly tightening up; not actionable yet but setting up—watch for a daily breakout with volume.
• $CHKP: Approaching all-time highs; whippy but a cybersecurity name to buy on big volume through the top—weekly/monthly strength supports it.
• $CRWD: Cybersecurity leader from last week; barely touched the 10-day—reinforces group strength.
• $GRRR: Powerful low-priced name with huge volume; whippy and not actionable yet, but worth watching for a tighter setup.
• $IBM: Tight consolidation near highs; actionable on weakness near the 10-day or a volume breakout—relative strength leading price.
• $MNDY: Highest volume ever on earnings; pulling back to the 10-day—watch for a shakeout and hammer close as a potential early buy.
• $NTNX: Broke out to new highs; whippy and loose, but tightening could signal a shift—keep on the radar.
• $ORCL: Gapping with AI/quantum buzz; shaping up but not tight—watch for old-school tech rotation with $IBM.
• $PANW: Cybersecurity name near highs from last week; less compelling than $CRWD but confirms group trend.
• $QBTS: Tight action above the 50-day; quantum leader buyable on strength with an intraday stop—liquid at 65M shares/day.
• $TWLO: Closed below the 50-day post-earnings; watch if it holds today’s low tomorrow—could base here if momentum persists.

Industrials – Transportation & Capital Goods:

• $BE: Bloom Energy catching eyes; wide but needs more time to shape up—energy rotation candidate.
• $GRAB: Bought last week on weakness; liquid and worth watching if travel sustains.
• $XMTR: Boxy pattern with a Launchpad; tight action—watch for strength above the 50-day.

Consumer Discretionary – Hotels, Restaurants & Leisure:

• $ALK: Airline tightening up; not actionable yet but fits travel rotation—extended and getting support at key averages.
• $ATAT: Chinese travel ADR with an IPO U-turn flag; whippy but powerful—monitor liquidity and group momentum.
• $EXPE: Smooth uptrend in travel; actionable today or on weakness near $204 with a stop at $200—breaking a 3-year base.
• $RCL: Tight, liquid cruise leader; nearing actionable—watch for a volume break through declining tops near highs.

Health Care – Biotechnology, Health Care Equipment & Services:

• $ABT: Abbott Labs in $IHI; shaping up with group strength—device rotation candidate.
• $BSX: Medical device standout in $IHI; tight and powerful—rotation leader.
• $EXEL: Biotech shaping up well; reclaimed the 50-day with tight action—watch for strength above the Launchpad.
• $HIMS: Extended telemedicine leader; needs consolidation—watch for a tight stop entry after its big run. (Technically a Specialty Retail name)
• $ISRG: Intuitive Surgical in $IHI; not listed but a device leader—check for tightness off screens.
• $NTRA: Sideways powerhouse; wide but near highs—watch for a breakout signal.
• $TEM: Shaping up in a hot group; wide but near highs—watch for tighter action.

Energy, Financials, Utilities, Real Estate, and ETFs:

• $AR: Energy name with potential; wide but worth watching as oil trends shift—monitor for tightening.
• $BEKE: Chinese real estate play tightening; whippy but aligns with financial rotation—keep on radar.
• $CBRE: Real estate services shaping up; not tight but fits financials rotation—watch for volume.
• $CEG: Trading like a champ; strong across timeframes—energy rotation candidate.
• $COF: Breaking out; tight and liquid—fits financials’ participation trend.
• $CRK: Energy play shaping up; needs more time but aligns with sector rotation—watch for volume.
• $GEV: Utility sister to $CEG; tight and strong—energy rotation candidate.
• $MS: Bank tightening near highs; fits financials’ strength—watch for a breakout.
• $QTUM: Diverse and illiquid but better-looking than peers—monitor alongside $QBTS.
• $SEI: Energy name catching eyes; wide but on radar—needs tighter action.
• $TPL: Energy leader with power; whippy but worth watching—monitor for a setup.
• $UPST: Fintech shaping up; wide but aligns with financial rotation—watch for tightening.
• $WFC: Bank forming a base; tight action supports financials’ trend—monitor for strength.

Ross’ Watchlist

• Communication Services: ASTS 
• Consumer Discretionary: ATAT EXPE RCL 
• Energy: AR CRK SEI TPL
• Exchange-Trade Fund: QTUM 
• Financials: COF MS UPST WFC 
• Health Care: TEM 
• Industrials: ALK BE GRAB XMTR 
• Information Technology: ASAN CHKP GRRR IBM MNDY NTNX ORCL QBTS TWLO 
• Real Estate: BEKE CBRE
• Utilities: CEG GEV