The TML Talk | January 15th, 2025

Market Overview

• Indexes and General Market Trend:
  • Recent pullback seen in major indexes (NASDAQ and S&P 500) but still within an overall uptrend on longer timeframes.
  • Several distribution days were noted, but leadership stocks are holding up well.
  • Recent tame CPI (Consumer Price Index) data spurred a rally, but resistance levels remain key.
  • Earnings season begins next week with major reports from Apple, Netflix, and other large tech firms.
• Current Market Status:
  • The market is in “wait and see” mode, with constructive action in leaders but not an overwhelming amount of setups.
  • Some leadership names in sectors such as semiconductors, tech, and energy are worth watching.
• Shakeout and Rally Pattern:
  • A key pattern seen in indexes and stocks: shakeout below key moving averages followed by a rally.
  • Stocks like Tesla and SoFi exemplify this pattern.

Key Lessons & Quotes

• “The market appears to be in a pause rather than a correction, with room for an uptrend to resume if leadership broadens.”
• “Leadership stocks will always tell you what the market is going to do next—watch them closely for signs of strength or weakness.”
• “Even if the market doesn’t print a formal follow-through day, constructive action in leading names can still confirm an uptrend.”

Actionable Takeaways

• Focus on Quality Leadership: Look for stocks exhibiting relative strength, tight consolidations, and strong group dynamics. Examples include Tesla, SoFi, and CRDO.
• Energy and Semiconductors Leading: Monitor these sectors for additional setups as they demonstrate leadership potential.
• Patience is Key: If the market continues to base, wait for tighter setups and confirmation of strength before committing heavily.
• Watch Earnings Season: The upcoming tech earnings will likely influence market direction and sector leadership.
• Develop a Routine: Use tools like relative strength screens and watch lists to track leadership and rotation.

Stock Mentions and Commentary

Semiconductors:

• $SMTC: Excellent relative strength near highs; a clear leader with potential if the market strengthens.
• $CRDO: Strong setup near all-time highs, showing tight action and accumulation.
• $AVGO: Constructive base with tight action and strong weekly/monthly charts.
• $MRVL: Tight action near key levels, solid relative strength within semiconductors.
• $QCOM: Reclaiming moving averages but facing overhead resistance; needs more time.
• $ARM: Tightening action within a long base; potential leader if it builds further.

Technology and Software

• $WIX: Tight weekly setup, showing accumulation and near breakout potential.
• $KD: Strong setup across timeframes; one of the best in the IT sector.
• $TWLO: Holding tight in a constructive base with solid relative strength.
• $PLTR: Pulling back constructively to moving averages; needs more time to set up.

Other Key Stocks and ETFs:

• $TSLA: Constructive consolidation above key averages and reclaiming resistance; holds leadership potential.
• $SOFI: Strong rebound from 65-day EMA with accumulation signals; constructive setup.
• $META: Tight consolidation above support; relative strength hitting new highs before price.
• $BE: Pullback to key averages; wide and loose action, but long-term trend intact.
• $IONQ: Quantum computing leader rebounding strongly with volume; speculative but promising.
• $FOSL: Holding above breakout but thin and volatile; less attractive compared to other setups.
• $GEV: Strong breakout with follow-through volume; a leader in the energy sector.
• $USO: Rising oil prices signal continued strength in energy-related stocks.