The TML Talk | March 12th, 2025

Market Overview

• Indexes and General Market Trend:
  • The NASDAQ 100 slid to new swing lows yesterday, breaking below its 200-day SMA—bounced today as Day 1 of a potential follow-through count; still awaits a 1.75%+ surge on increased volume within Days 4-7, reflecting a market struggling with weak leadership and fading momentum.
  • The S&P 500 tagged a new low yesterday alongside the NASDAQ, closing below its 200-day SMA—today’s rally lacks gusto, needing robust volume and broader leadership confirmation in the coming days to shift from this fragile, oversold state to a convincing upturn.
  • Small caps via $IWM continue their dismal run, trailing with no rebound spark—mirroring a lackluster Dow, both range-bound and weaker than broader indexes, underscoring a market where defensive plays outshine growth amid persistent downward pressure.
• Current Market Status:
  • The market’s trending lower for weeks, shedding recent growth hopes—traditional sectors like tech and biotech show thinning leadership, with only a handful of names standing tall, suggesting this rally might be the last gasp of resilience rather than a reversal.
  • China remains a lone bright spot—stocks with high volume and relative strength new highs persist, though extended; focus stays on these leaders, tempered by their volatile nature and lack of broader confirmation across other growth areas.
  • Defensive havens like gold and select financials hold firm—outpacing faltering growth names, as money flows out of once-strong sectors like retail and home construction, painting a picture of caution over opportunity in this choppy tape.
  • Volatility’s eased slightly with today’s bounce, but conviction’s low—yesterday’s lows and today’s tepid push signal a market adrift; without a 1.75%+ follow-through day soon and leadership breadth expanding, this remains a fragile, uncertain phase.

Key Lessons & Quotes

• “Market’s just kind of been sliding straight to lows, we made a new low on or new swing low I should say on the NASDAQ and we’ll see the S&P yesterday, we ultimately bounced today looking at leadership, just big picture it I guess you could say it had been going back and forth from looking like leadership could possibly save the market then it had thinned out.”
• “Looking through any traditional growth groups and going oh okay here’s three names that look okay is there any confirmation then the answer is no there isn’t confirmation so it I’m not making you know I’m not making any Market calls for sure and every time I’ve tried to take a guess at what the market might do based on the way my leadership list has looked it has been I mean wrong.”
• “Soonest we would follow through remember we’re looking for once we start counting our day one is today, we’re ideally between days four and seven we want to see either the S&P or the NASDAQ rally a minimum of 1.75% and volume has to pick up from the prior day it doesn’t have to be above average just has to be bigger than the prior day.”
• “Different times I don’t know where our most recent top was in the markets but probably not too far off here and I you know I’m just saying during the times where the Market’s weak or things are not working I’ve you know and that is also why I always tell you in my in my older age I look for aggravation free because yeah it it can be it’s painful to do it.”

Actionable Takeaways

• Assess Leadership’s Last Stand: Watch if today’s survivors—like China and gold—hold or crack; thinning breadth across groups hints this might be what’s left, not a rally’s start.
• Await the Follow-Through Trigger: Hold off until a 1.75%+ day on increased volume hits within Days 4-7 post-today’s Day 1—no undercut or distribution—to signal a real shift.
• Spot Defensive Resilience: Focus on stocks hugging averages like the 10-day or 50 SMA amid sell-offs—defensive names could shine if growth keeps fading, offering safer plays.
• Test China’s Edge Cautiously: Look at China’s strongholds for light pullbacks with volume—keep stops tight at key levels to manage ADR gaps in this shaky market.
• Prioritize Tight Patterns: Seek liquid stocks with stable averages over volatile ones—relative strength new highs before price can guide, but wait for market clarity.

Stock Mentions and Commentary

Communication Services – Internet Content & Information:

• $ASTS: Held above the 50-day, lighter volume today—relative strength line nears a 20-day dip; still outpaces most, but lacks punch for immediate action.
• $NTES: Video game star—hot title drives it, holding averages; liquid but lacks top-tier power, watch for tighter action in a stronger market.
• $SE: Highs with big earnings ahead—outshines peers in progress to prior peaks; strong, liquid, but extended, needs a pullback for entry.
• $TTWO: Gaming resilience—bounced off support, RSNHBP; tightens near 23-day with strong estimates, actionable above highs if volume aligns.

Consumer Discretionary – Restaurants, Education, & Leisure:

• $BABA: Chinese titan shines—volume strong, RSNHBP intact; all timeframes scream power, a growth enhancer if the market turns, though gappy ADR nature persists.
• $JD: Chinese retail—constructive post-earnings pullback; undercut a wedge, holding above lows, viable if China theme regains steam with market lift.
• $LI: Chinese EV leader—weekly/monthly power, RSNHBP; lower quality but standout, watch for support at averages in this weak tape.
• $TAL: Education name—post-breakout pullback, RSNHBP; holds above lows, viable leader if group recovers, needs market confirmation.
• $XPEV: Strongest Chinese EV—RSNHBP, monthly breakout potential; not buyable now, but group’s top dog, needs volume to sustain.
• $ZK: Whippy Chinese EV—RSNHBP, less liquid; monthly holds, tough to hold, watch for a character shift if group strengthens.

Consumer Staples:

• $KVUE: Consumer goods—linked to $CVS products; not analyzed standalone, but its presence in stores hints at defensive stability, monitor if trends emerge.
• $MO: Cigarette safety play—rides 10-day, steady; tied to Marlboro, not exciting but outpaces most in a defensive lean, worth tracking for stability.

Financials – Capital Markets & Insurance:

• $FUTU: Chinese financial—up slightly, mirrors $KWEB’s fade; daily, weekly, monthly hold firm, but lacks excitement without broader group confirmation.
• $PGR: Progressive shines—near 10-day amid market lows; name-brand stability, slow but solid, a defensive standout if growth stays weak.
• $ROOT: Insurance growth—holds up, more exciting than $PGR; tightens near averages, a potential mover in a better market, watch for volume.

Health Care – Biotechnology & Pharmaceuticals:

• $ABBV: Private bull market—won’t crack the 10-day; liquid, earnings strong, a rare biotech gem holding firm as the group fades.
• $ADMA: Biotech standout—hammer bar, Launchpad follow-through post-EPS; RSNHBP leads price, earnings glow, buyable in an uptrend, watch the 50-day.
• $AKRO: Whippy biotech—bounced off 50/65-day, light volume; RSNHBP hints at potential, needs a character shift for real playability.
• $ARQT: High RS biotech—whippy, but RSNHBP across timeframes; monthly breakout looms, keep on radar for a tighter pattern shift.
• $CVS: Turnaround star—rallied off lows, RS steady; not growth-focused, but strong for a drugstore, worth tracking for stability.
• $HALO: Steady biotech—trends above 10-day, RSNHBP; solid revenue, earnings growth, a sleeper leader if the group revives.
• $QURE: High-volume spikes—HVE, RSNHBP, choppy revenue; story stock with trials, watch for support at 50/65-day or a roll-over.
• $SWTX: Biotech power—RSNHBP, revenue climbs; liquid, could tighten up, a performance booster if the market supports it.
• $TGTX: New highs—RSNHBP leads, barely pulls back; liquid, profitable, volume in right spots, top biotech pick for strength.
• $ZLAB: Chinese biotech—rides 10-day, RSNHBP; liquid enough, volume pre-earnings, a China theme standout with upside potential.

Industrials – Machinery & Energy Equipment:

• $BE: Electrical equipment—powerful off lows, RSNHBP; not growth-focused, but liquid and strong, a potential enhancer in a bull run.
• $CYD: Singapore-China hybrid—whippy off highs, tightening; RSNHBP, liquid, watch for a 20-year breakout if support holds.
• $ERJ: Tight along 10-day—constructive, liquid; group’s fading, but outpaces peers, viable with a stop at today’s low in an uptrend.
• $GDS: Chinese data center—wide, loose off averages; liquid, Launchpad brewing, whippy risk persists without broader lift.
• $HSAI: Chinese EV supplier—50% breakout, inside day; huge volume, extended, watch for a flag to form off this surge.
• $KC: Chinese industrial—tight closes, respects averages; liquid ADR, strong on all timeframes, gappiness tempers its appeal.

Information Technology – Cyber Security, Gaming, & Software:

• $CHKP: Failed breakout—slipped below 23-day; group’s mixed, still holds above 50-day, watch for recovery or further fade.
• $CORZ: Gaming name—tight near highs, RSNHBP; liquid, estimates soar, a performance booster if the sector catches fire.
• $CRSR: Gaming play—near highs, RSNHBP; tightens with volume, strong estimates, a standout if gaming theme gains traction.
• $OKTA: Champ off highs—won’t touch 10-day; liquid, RSNHBP, strong non-China tech, needs a dip for entry.
• $PLTR: Near resistance—volume aligns, RSNHBP; liquid, tightening, could surge with market lift, watch for confirmation.

Materials – Metals & Mining:

• $AEM: Gold play—implied in gold rally, RSNHBP; defensive strength aligns with sector, steady performer to track in this tape.
• $HMY: Gold standout—RSNHBP, strong pattern; aligns with gold’s defensive power, watch for continued volume support.

ETFs:

• $GDXJ: Gold miners—bounced today, RSNHBP; best-looking ETF, defensive strength mirrors gold, a solid watchlist contender.
• $GLD: Gold ETF—best chart today, RSNHBP; defensive leader, shines as growth falters, a safe haven to monitor.

Ross’ Watchlist

• Communication Services: ASTS BILI NTES
• Consumer Discretionary: BABA LI* XPEV ZK*
• Consumer Staples: KVUE MO PM
• Financials: FUTU ROOT
• Health Care: ABBV ADMA* AKRO ARQT GRAL KRYS QURE SWTX TGTX ZLAB
• Industrials: BE CYD ERJ GDS KC
• Information Technology: ACMR CRSR OKTA
• Materials: AEM HMY
• Real Estate: BEKE
• ETFs: GDXJ GLD