Good morning,

The long-overdue tech wreck is here, with XLK down five of the past six days and already in an 11% drawdown. There haven’t been many places to hide with semis, software, and hardware (read: Apple) all down sharply over the past week.

However, there’s one sub-group that I pointed to as a potential opportunity on Monday, and today I’ll highlight two of my favorite single-stock setups.

We’ll also review:

• Semiconductors with more to go to the downside

• Software winners and losers

• The dash for trash

• Quiet improvement in private equity stocks

• Energy

• Hot List updates

• and more!

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Tech wreck: Semis

Marvel is begging to fill this gap

Already in a 22% drawdown, that would put it down 30%.

AMD left a gap back near $360

Which is where both momentum measures peaked and began rolling over. I think it gets there.

Western Digital is still 98% above its 200-DMA

Is it really that crazy to think it tests this basic metric after a 2000% gain in 14 months? Right now it would line up nicely with a zone of support near $300.

Tech wreck: Software hasn’t been much better

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Good morning,

Late last week, the market got some much-needed rotation, and, as it often is, sentiment was the catalyst.

While surveys, the VIX, option data, and other sentiment all have their place, one of my favorite sentiment indicators is ETF flows.

Just like our previous reports, I’ll highlight ETFs that fall into one of 3 categories:

• Overly aggressive. These ETFs have seen extreme inflows. For an uptrend, I don’t believe that alone is a reason to sell but it’s a yellow flag and could indicate more downside vulnerability in a correction.

• Contrarian positive. These ETFs have seen significant outflows recently and extreme readings could indicate selling is unlikely to continue to the same degree. Potential tailwind if a downtrend can stabilize and a bullish indicator for uptrends or ETFs breaking out.

• Apathetic. Flows here aren’t extreme in either direction but that means there could be room to run for the underlying trend.

Let’s get into it!

Overly aggressive

Oil refiners

The VanEck Oil Refiners ETF has taken in its most inflows ever over the trailing three months. Adding to potential warning signs is a recent lower high. A close below $47 would complete a small head and shoulders top.

Clean energy

Inflows for ICLN have surged, hitting their highest levels since 2021. These are a blip compared to the amount this fund took in during the post-Covid bubble (shown below), but it makes you more vulnerable to a sell-off, as we saw last week.

Software

Another group where sentiment got the best of it last week was software. The majority of IGV buyers did well for themselves, flooding in at the bottom, but they still had to endure an 12% top-to-bottom pullback last week.

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Full disclosure: I am writing this intro from a place of frustration.

My wife is out of town this weekend and I’ve got the kids, so I was getting an extra head start on the report and had the outline fully done before lunchtime on Friday.

The title was: Finally, a crack.

Well, by Friday afternoon, it was clear that crack was in a dam and the whole damn dam had given way.

As Tyler Childers sings, “Where we gonna go when the dam breaks loose?”

Well, apparently not into gold or Bitcoin.

But I won’t sugarcoat my thoughts:

I think we’ve entered a correction.

Now, if you’ve been following along, you know I haven’t liked this market for a while, and have been negative on the semiconductor/memory trade. I thought it was the top three weeks ago, and it wasn’t.

But there’s simply no technical bull case for those stocks after last week’s action, and while I always caution betting against trends, if there was ever a time to go underweight tech stocks tactically, it is now.

As for the rest of the market, last week’s callout that a strong jobs report represented a material risk turned out to be right. 10s held support and spiked, 2s soared to a 52-week high, and Fed fund futures traders pulled a hike up into this year.

None of that bodes well for a market that ex-technology hasn’t done anything in four months, though things were historically “not that bad” under the surface on Friday, as today’s report will show.

The last thing I’ll say is that I know you’re all itching to know “the level” we might trade to. But remember, correction bottoms are about market internals, not about getting to some magic level. I’ll highlight some “levels of interest,” of course, but the mindset going into this week is: The path of least resistance is lower, and we believe that until we start to see breadth and sentiment get flushed.

This week’s report will review:

• The end of the semiconductor/tech run

• The problem with the rotation trade

• Rates following the jobs report

• Major index technicals

• Other ETF movers

• IPO fever

• and more!

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Good morning,

May was a solid month for the Blue Chip Hot List. Our intra-month activity quieted down, with no mid-month sells, and despite generally weak breadth conditions, eight of our ten holdings were positive, while seven of ten outperformed the S&P 500 (+2.95%) since our last update.

The average return (+3.68%) also bested the index despite only one tech sector holding.

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Good morning,

Both models managed to outperform their benchmarks since our last trades on May 5, a remarkable feat given the lack of relative strength anywhere but technology.

Last month’s forced increase of tech exposure was a big reason for the outperformance, but our software position performed even better than broad technology, and holding onto cash and going underweight financials (which were outright negative) also aided performance.

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We’re not big on the economic data around here, but this week looks to be important for the market, or at least the market ex-technology.

Tech and semiconductors continue to march to the beat of their own drum but the rest of the market has been missing in action. In fact, since April 17, the tech sector is up 23.7%, and energy (+2.3%) is the only sector up by more than 1%, while six are outright negative.

In fairness, things haven’t been getting worse over the past two weeks, but during that time we’ve got oil prices lower by 13%, and bond yields 20 bps off their highs. I frankly think the bar should be higher than “not worse”.

Which brings us to the economic data. This week, investors receive the jobs treatment, with nearly every major labor market report highlighted by the May BLS release on Friday morning.

With Fed fund futures still pointing to a hike as the next Fed move, the risk this week might be that the jobs market isn’t weakening. Or worse, is strengthening.

I think that’s what the market ex-technology has been worried about, but it also means this week has a catalyst for bullish breadth expansion if yields break lower and lose their recent breakouts.

This week’s report will review:

• Key levels for stocks, rates, Bitcoin, and more

• The S&P 500’s 9-week win streak

• A historic two-month run for technology

• What’s going on under the surface

• June seasonality

• Oil prices and energy

• and more!

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Good morning,

Last week’s “small-cap growth ideas” edition of this report provided more than 30 potential long ideas, focusing on bullish long-term charts and small-cap stocks with more than 30% revenue growth over the past year.

But, like the Base Finder report that is more big-picture in nature, I plan to regularly review these stocks and call them out when I see bullish tactical setups.

We’ll start this week with a few of my favorites, but also look at:

• Top psychedelic plays (the PSIL ETF was featured in Monday’s Playbook)

• Two bullish utility setups (flushed sentiment also featured in the MMP)

• Large-cap biotech

• Stocks on bottom-watch

• Hot List updates

• and more!

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Tactical buys from last week’s small-cap growth ideas

ARWR: Arrowhead Pharmaceuticals

ARWR hasn’t quite escaped this base and made new highs, but I still see it as above the two most important lines. There’s potentially $20 of upside from here based on the measured target.

ATEX: Anterix

I love a good base and being there before something breaks out, but you can’t beat a strong uptrend. ATEX is just that and hit another all-time high yesterday, already up 8% since last week’s report.

MRX: Marex Group PLC

I like this bull flag in MRX to break out higher. It hasn’t happened yet, but the range near $50 provides three levels of support: The long-term breakout point, a recent bullish reversal, and the rising 50-DMA.

ODC: Oil-Dri Corp. of America

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Good morning,

You all came back from the long weekend refreshed and ready to go.

If you’re new around here, the last Overtime report of each month is Mailtime, which is paid subscribers’ chance to send in chart requests and market-related questions.

We had some really great participation this week, thanks to everybody who sent in questions.

Let’s see what is on your fellow readers’ minds!

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Questions

What are the charts showing for developed international and emerging markets stocks? Especially relative to US stocks?

Foreign developed isn’t a bad chart, and above you can see EFA trying to break out of a consolidation similar to what RSP and the Dow did last week. However, relative to the US, it’s a harder sell, and I don’t see the case for portfolio exposure. EFA briefly hit 52-week relative lows last week and is below a flat 200-DMA.

For emerging markets, it’s a far different story:

EEM hit a new all-time high yesterday and is above a rising 200-day vs. SPX. The semiconductor theme is a big story here, as EAFE has limited exposure, but EM’s top weight is Taiwan Semi. In addition, EEM has greatly benefited from SK Hynix and Samsung, thanks to its classification of South Korea as an emerging market, a topic discussed in the May 11 Playbook.

The TLDR version is that only emerging markets have a bullish relative trend vs. US stocks, but recognize that it’s highly dependent on the AI/semiconductor trade. In fact, TSM has boosted Taiwan to be a larger weight in EEM than China, while SK Hynix and Samsung are now larger than all of India.

Do have you thoughts on the VLUE (iShares MSCI USA Value Factor) ETF? It increasingly looks and acts like the momentum ETF, and curious how often this happens?

So this is also a semiconductor story, as you can see from the top 10 holdings of VLUE below.

The top four holdings are semiconductors or AI adjacent (CSCO) and Qualcomm and Western Digital can also be found in the top ten. It’s a little ironic that the number 2 holding has a forward P/E of 145, but (at least as of the last rebalance) these all must have screened as cheap using the ETF’s methodology (criteria below):

I don’t have a definitive way to view how often this happens but the fund is having its best two months on record (+33%), so it’s safe to say this is extremely rare. I will just flip the question on its head a little bit and tout this more as a win for momentum than value. Momentum can be whatever is working in the market, whether that’s energy stocks, defensive utilities, or high-flying semiconductors.

Since VLUE’s inception in 2013, the fund is up just 292% vs. a 376% gain for the S&P 500 (price returns only). MTUM, the iShares MSCI USA Momentum Factor ETF, is up 515%.

Chart Requests

AMBQ: Ambiq Micro

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Nothing is ever as good or bad as it seems, and the theme of today’s report, and arguably last week, is offsets.

Last week, the two big events were Nvidia and retail earnings. Nvidia, which had rallied hard ahead of its report, failed to deliver more gains, while retail stocks, which were in the doghouse, saw a sizable bounce.

That bounce in the rest of the market pushed the equal-weight S&P 500 to a new all-time high, finally joining its cap-weighted counterpart.

That’s unambiguously good news, but as I review this market, for every pro I can find there seems to be an equal and opposite con. A few other examples:

• Breadth improved last week with four of five days seeing more advancers than decliners for the first time in over a month. But, the new high data is still missing in action.

• Memory mania has cooled with DRAM flat over the past two weeks, but the strength in Apple (a May Blue Chip Hot List addition) has more than made up for it.

• Spot oil prices are down meaningfully, but the December contract is still holding its breakout.

• AAII investors are getting more bearish but the put-call data suggests nobody is actually buying protection

I could go on, but suffice it to say, the risk across the market seems balanced.

However, it’s our job to find where the reward isn’t, and today’s Plays and supporting charts will highlight two portfolio themes where investors can add value, as well as some compelling ETF and single-stock trade ideas.

This week’s report will review:

• Key support on Bitcoin

• The most important charts from last week

• Offsets in breadth, sentiment, and oil prices

• ETF movers

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Good morning,

Today’s Stock Trends is going to look a little bit different.

You may have noticed I’ve started to regularly feature a sub-section called “small cap long ideas.” The thought was to put some under-the-radar, smaller stocks, with high potential upside, in front of you before they become household names.

And today, we’re taking that even further by adding a fundamental screen. I reviewed every stock in the Russell 2000 with sales growth of at least 30% over the past year and brought you the best charts I could find.

We’re taking a more big-picture view, so each chart is shown on a weekly basis with only relative performance in the bottom panel. I’ve also included the new “AI says” summary for each one, so we have a clue what each one does.

Finally, they’re grouped into a few loose categories, some based on the chart characteristics, others based on their industry. If there’s a macro takeaway, you’ll quickly see how deep the AI trade has extended into the small cap universe, and far from the traditional tech and semiconductor themes.

I hope you all like it!

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Base Finder worthy small caps

WLFC: Willis Lease Finance

AI says: A $1.4 billion financials stock that is a global commercial aircraft engine lessor and servicer; the launch of Willis Aviation Capital — a third-party asset management platform backed by institutional partners including Blackstone and Liberty Mutual — represents a significant expansion beyond balance-sheet leasing into fee-based recurring revenue.

WLFC has pulled back sharply from resistance over the past two weeks, but is coming into a big zone of support. As long as that holds, this base should continue to build, and eventually, break out.

PNTG: The Pennant Group

AI says: A $1.1 billion health care stock that is a home health, hospice, and senior living operator across 17 states; accelerating post-acquisition integration in the Southeast, a 33%+ revenue growth trajectory, and favorable hospice reimbursement rate proposals are the key near-term catalysts.

PNTG is pushing to the top of an 18-month base. A breakout above $37 measures to $52.

NPCE: NeuroPace

AI says: A $620 million health care stock that is a medical device company focused on drug-resistant focal epilepsy, offering the proprietary RNS System — a brain-responsive neuromodulation device; major Medicare reimbursement rate increases effective January 2026, plus a pending FDA label expansion into generalized epilepsy (IGE), are the primary growth catalysts.

Another Base Finder-worthy stock, NPCE is testing the top of a two-year resistance range and bounced off a rising 200-DMA last week. The coiled relative chart looks ready to follow a breakout higher; last week’s low at $13.65 could be used as a stop.

MRX: Marex Group

AI says: A $3.6 billion financials stock that is a London-based financial services platform providing liquidity, market access, and clearing services across commodities, equities, and fixed income; a rapid acquisition strategy — including Winterflood market making and Webb Traders — is broadening the revenue base and expanding its U.S. structured products footprint.

MRX IPO’d just over two years ago, and just broke out of a one-year base. That breakout was successfully retested two weeks ago, and the minor pullback since looks like a textbook buying opportunity.

UTI: Universal Technical Institute

AI says: A $1.7 billion consumer discretionary stock that is the leading vocational training provider for the automotive, diesel, and skilled trades sectors; surging demand for skilled tradespeople and a 20+ new program rollout in fiscal 2026 underpin a path to $1.2 billion in revenue by fiscal 2029.

A small-cap long idea from March 26, UTI has pulled back about 8% this week. However, holding the long-term support zone and short-term uptrend line, this looks like an opportunity if the stock can stabilize.

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REITs

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Good morning,

Today’s report is all about inflation.

Hopefully, we covered the basics and what investors should be doing in their portfolios in yesterday’s Playbook. But Overtime is our chance to go deeper, and this has the potential to be the most important story outside of AI this year.

We’ll break down:

• Why oil matters for inflation and what the technicals say

• Other inflationary forces

• Market-based expectations

• The Fed

• Interest rates technicals across the curve

And of course, we’ll end by reiterating how investors should be positioning within their fixed income allocations.

Let’s get into it!

Let’s start with the obvious cause: Oil

Oil has and always will matter for inflation

As expected, the oil futures curve has continued to catch higher

Not only this, but the backwardation has been getting more extreme recently. This is a sign of increasing pressure on prices for delivery right now, and we can see that momentum building in spot prices:

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Markets don’t correct without a catalyst, and there’s momentum building behind a familiar one: The Fed.

Interest rates broke out across the curve on Friday, but investors shouldn’t think of this as a one-day move.

Yields have been searching for direction for years, slowly consolidating and tightening into the apex of triangle patterns when you look at everything from the 5-year to the 30-year.

The long-term technicals have said these consolidations “should” resolve higher.

The recent history of Fed cutting cycles would suggest the peak is in, and they “should” resolve lower.

Score one for the technicals.

As today’s Playbook will show, the breakout should be believed, as should the Fed funds futures pricing, which now shows a hike as the likely next move. Any fan of market behavior should appreciate the deep irony of this happening the same week as the Senate confirmation for a Fed chair explicitly nominated for his promise to bring down interest rates.

I want to keep this report high-level and actionable, but tomorrow’s Overtime piece will go more in-depth on rates, underlying drivers of inflation, and what the breakeven markets are saying.

As for today’s report, we will look at:

• The most important inflation and rates charts

• Major index technicals

• A reversal in semiconductors

• ETF movers

• Commodities and the dollar

• Breadth

• and more!

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Good morning,

Tuesday morning’s Overtime report highlighted the importance of the healthcare sector holding its March lows, and it responded with a 2% gain that day.

The trends aren’t great here (the 50-day just crossed below the 200-DMA) but a bullish momentum divergence aids its prospects for holding support.

Today, we’ll start off with a bottom-up review of the sector and what some of its bellwether stocks are saying.

We’ll also end with long ideas that just missed the cut for the latest round of Hot List additions and some Hot List updates.

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Healthcare focus

CVS completes a massive bottom

Too tactically extended to chase but the measured target says the 2015 all-time highs near $114 are in play.

The beaten-up health insurers continue to work higher

Humana is up an astonishing 83% since the market’s March 30 lows. Approaching a big resistance point and with an RSI-14 of 88, expect a consolidation. Similar look for UnitedHealth 👇

Top stock LLY is back on the right side of a key line

Not the best chart, but yesterday was the first one-month high since the stock’s all-time high on January 8.

Watch this bullish divergence on Intuitive Surgical

No group has been worse than the medical devices. A bullish change here would be important, but I’m not a buyer.

Boston Scientific approaching long-term support

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Good morning,

As promised, today you’re getting an old-school chart book. Lots of charts, few words, but with the important caveat that we’re looking at everything BUT technology.

We’ve hammered tech and semiconductors pretty well in recent Playbooks, so if you haven’t seen those, check them out.

This week’s Overtime report will hit the ten other sectors, along with any thematic and focused ETF charts that caught my eye.

Let’s get into it!

All the other sectors (ordered from high to low within yearly range)

Real estate is the only sector besides tech to make a 52-week high since February

And even it can’t outperform. Like it long in absolute terms, with $43 as key support going forward.

Industrials stalling below the YTD highs

False breakout from the short-term trading range last week bears watching. $175 needs to be overcome.

Same look for materials

$52.30 a clear line of demarcation.

Communication services has big base potential

But the relative performance has fallen off a cliff. Under the hood, this is a huge stake in Alphabet (GOOGL), which has soared to all-time highs, and 75% warmed over garbage.

Consumer discretionary running into long-term resistance line

Another sector where you have Amazon (25%, really strong), Tesla (20%, signs of life recently), and 55% garbage going straight down. Just look at the equal-weight ETF hitting a fresh one-month low yesterday 👇

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It’s a one-trade market out there, and, at least as of Friday, it doesn’t appear to be done yet.

Today, we’ll walk through some historical stats on just how crazy and rare the semiconductor move has been, as well as the lack of participation in the rest of the market.

I’ll also highlight a couple of under-the-radar momentum indicators that performed well during the dot-com bubble and haven’t turned red yet.

This week’s report will review:

• A bearish message from the financials sector

• The S&P 500’s weekly winning streak

• Breadth

• Meme(ory) stock mania

• Risk appetite signals

• Oil and rates

• and more!

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Good morning,

April was a mixed bag for the Blue Chip Hot List. We took profits or cut losses in three stocks mid-month, for an average gain of 26.2% and average outperformance vs. the S&P 500 of +20.7%, thanks primarily to long-time holding Moderna.

Two of the four stocks currently on the list outperformed the index since our last official update on April 2, though the average return (+7.9%) lagged the index’s 11.9% gain.

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Good morning,

April was a frankly abysmal month for the relative performance of our ETF models. Though the absolute gains were good enough for Ultra-Growth’s best month on record, both portfolios trailed their benchmarks by more than 100 bps since our last trades on April 7.

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The S&P 500 closed at another record high last Friday, marking its fifth consecutive weekly gain and third-straight weekly record close.

However, for at least the second straight week, there was a complete lack of new highs with it.

I want to be clear that poor breadth isn’t a reason to be outright bearish. But, I think what we’re seeing recently is a perfectly good reason to not be overweight equities, or out over your skis.

There are three important dynamics for investors to be aware of right now:

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Good morning,

Four of the Magnificent 7 reported earnings after the bell yesterday, and S&P 500 and Nasdaq futures are both up about half a percent in premarket trading. We’ll end today’s report by highlighting the pre-market moves and key levels to watch for Microsoft, Meta, Alphabet, and Amazon, but first, I want to look at:

• Semiconductors most vulnerable to a sell-off

• What gold miners may be telling us about gold

• Two buyable breakouts in financials

• Two big bases that haven’t broken out yet in energy

• Follow-ups on recent small-cap long ideas

• Hot List updates

• and more!

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Semiconductors most vulnerable in a sell-off

I’m highlighting three stocks that are extremely stretched relative to their 200-day moving averages. By definition, these are also some of the strongest uptrends, but given the risks I highlighted in the Playbook (and in this article for the CMT Association), plus the sell-off to start this week, I think they are worth flagging.

Sandisk is up (double-checks chart) 3,131% over the past year

And 211% above its 200-day moving average, which has honestly been about normal since it got a 200-day moving average. New all-time highs yesterday mean you can’t fight this trend, but my goodness.

Intel is 140% above its 200-DMA

Is this the best investment the government has ever made? On one hand, this is arguably a breakout 26 years in the making. On the other, this is literally double the most extreme reading it saw in the dot-com bubble.

Micron up 574% over the past year

The reading vs. the 200-day has actually cooled after a two-month consolidation, but it’s still a two-standard deviation extreme from its mean.

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Gold miners are sending a bearish signal on gold

Agnico Eagle Mines testing critical support

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