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>> Hey everyone, Lawton here with Verified
Investing back with another ProCharts
video. In today's ProCharts, we're going
to be talking about everybody's favorite
stocks. But before I get any further,
guys, please consider liking this video,
subscribing to the Verified Investing
YouTube channel, and leaving a comment
down below of what you want to see next.
Um the markets are moving today and have
been moving pretty decently, so we're
going to cover all of that. But liking
this video and subscribing really helps
us to continue to create free content
just like this. With that being said,
let's hop right into the charts. And
we'll start with the S&P.
Now, the S&P has been trading
along this line. It's been pushing up
nicely since Friday
after all this AI craze.
And yesterday,
kind of paused. Got as high as 775, and
the question was, could we hit $780?
Could we make new all-time highs on the
S&P? And certainly felt that way on
Monday.
But
to say there's been a massive reversal
so far
would be accurate.
We've fallen since its highs yesterday
down about 1% on the S&P. Now, it might
not look like the biggest fall,
but does anyone know what kind of
pattern we're creating?
We're actually creating, and it's not
complete yet, right? So, a little more
work to do,
but we are coming in and creating a head
and shoulders pattern.
A bearish pattern here on
the uh S&P. Now, it's kind of sideways,
it of slanted upwards, right? But, it's
still valid.
And we know that with head and shoulders
patterns, we can have a nice measured
move. Let's go ahead and take the
highest point of the head, take it down
to the neckline, and draw this down.
Depending on where this ends up
ultimately breaking, we could see a move
back down towards the May lows, the lows
of
since May.
About a 6% drop, depending on where we
end up breaking this.
Now, to play this, you could play it a
couple ways.
But, generally with head and shoulders
patterns, you either enter on
confirmation of a break,
or let's say it retraces back to the
neckline, you can enter there and wait
for a move lower.
Something also interesting to note, the
last few times I've talked about the S&P
and the Qs, I've talked
about how they've started to decouple,
right? The S&P was pushing up making new
all-time highs like it did just um
just last month.
But, the Qs were still behind, not able
to quite make those
all-time highs.
Now, the Qs though
have certainly caught up. We can see
that
the Qs made all-time highs here on the
3rd of June. If we go back to the 3rd of
June, so did the S&P, but we made even
higher highs
on the 13th of August.
Comparatively, the Qs on the 3rd of
August,
where was that? Just around here, right?
3rd of August was down here.
Let me make sure I get this right. 13th
of August, sorry.
13th of August, that would make more
sense.
Was up here, right?
So, closer to new all-time highs, still
about but still 2% away. But yesterday,
we actually tested
new all-time highs. We're so close to
potentially making new highs on the Qs.
And generally, historically, if you take
a look back, let's zoom out a little
bit.
Compare the S&P and the Qs.
Their charts look kind of similar. But,
you can see as of late, we've you know,
kind of totally changed that.
And they have started to decouple away
from each other.
So, what does this mean?
Well, the fact that the Qs are pushing
up
towards new all-time highs and the S&P
did as well, means that tech right now
is stronger comparatively to the rest of
the market. Right? I would argue that
down here,
you know, back here, 13th of August with
S&P making new all-time highs. And you
know, the Qs sitting around here, we
were weaker. Tech was a weaker general
uh relative to the rest of the markets,
but now I'd say it's it's caught up and
and actually
is stronger. Right?
Um but moving forward, I don't have that
same head and shoulders pattern that I
do on the S&P here
on the Qs.
But, I still have a really nice up
sloping trend line.
Right? Where if we break this, right? If
we come down and break this, I could
easily see a move down towards 670.
And that would be about 7 and 1/2 to 8%
lower from depending on where the uh
trend line broke. And trend lines are
the same thing as head and shoulders
patterns in that you you can enter
either on a break or on a retrace
back to that trend line or neck line in
the case of the head and shoulders
pattern.
SMH
uh the semiconductors way way off of
their highs. This is when you know,
semiconductors ruled the markets and you
can see now
way off from their all-time highs yet
the Qs and the S&P continue to start
testing
new all-time highs, right?
But speaking of specific semiconductors,
we can go a little more deeper.
Looking at AMD, you could argue, well
AMD is pushing actually made new
all-time highs today.
But the thing you have to remember
is that when we're looking at the SMH
it is uh an amalgamation of different
semiconductors, right? It's an ETF
holding multiple different
semiconductors. So while AMD did push to
new all-time highs today before pulling
back
we still have Micron, right? Micron, how
far down from all-time highs?
14%. Nvidia, how far down from all-time
highs?
5%. Broadcom, how far down from all-time
highs?
Geez, 28% down from all-time highs.
So while the performance of a single
stock within a specific industry might
be doing well
that doesn't mean the entire sector is
doing well.
A couple more things to touch on.
McDonald's, look at this beautiful sell
down here on McDonald's. Why is
McDonald's selling?
Well, McDonald's is selling because
right? Because
they
announced a plan to reinvest in the
company. Now, basically what this plan
is is is investing a lot of money into
the companies to increase their margins
to about 50%
by 2030 as well as modernize and um
improve both the quality of their food
and their restaurants, right?
But, you know, taking a look at this you
taking a look at the charts here like,
well, why is this down then? That all
sounds good. Going to increase margins,
have a nice plan, going to increase
infrastructure.
Well,
a lot of that investment is
front-loaded, right? So, investors are
concerned that hey, McDonald's is going
to spend too much money too quickly. So,
I'm just out. I'm not interested in it.
But, I really love this level on
McDonald's for a potential trade.
And we're looking at levels that we
haven't seen since 2022,
guys.
And if we continue to fall,
you could be headed to lows since 2021
or even lower, right? But, I I
definitely anticipate a bounce
before that, at least a technical
bounce.
We've moved down just from March down
about 31% on the stock of McDonald's, so
definitely is due for a bounce. The last
thing I'm going to talk about is IONQ.
IONQ,
the
uh
the quantum computing world, right? One
of the leaders in quantum computing
announced that they had an advanced
decoder which
um, I don't know too much about quantum
computing, but it basically streamlines
uh the processes
when the uh quantum computer is working,
right? And compacts it. Before, I
believe it had a multi-step process to
achieve
um, decoding, but now it's all fitted
into one facet, so making the computer
smaller and more efficient, right?
Causing IONQ expectedly, right? If this
is truly the future,
to gap up 12, 13%. But, look at this
massive reversal here and IONQ still up
right up 5% right was up as little as 2%
right but not the great big 13% which we
initially saw.
And on on sympathy stocks like Virgin
Galactic
other
um
of these quantum stocks
what happened? They gapped up because
IONQ did.
6.7%
and now negative
right? So just kind of selling the news
right? You like oh my god this is great
news everyone rushes into the quantum
markets and then
the rug is pulled. Right?
But with that being said guys that's all
I have for you today. Before you leave
make sure to like this video subscribe
to the Verified Investing YouTube
channel and leave a comment down below.
Hope you guys have a wonderful rest of
your day
and I hope to see you guys next time
on the pro charts. Have a good one take
it easy. Bye-bye.