Daily Rundown: April 21

JD DURKIN: Good morning, members, one and all. AAP team member Helene Meisler joins me now to check in on the technical landscape and, of course, to share her thoughts on some of the portfolio's biggest holdings. But, of course, as always, before we get started, just a reminder that some of Helene's views that you're about to hear may differ a little bit from what you've heard from someone like Chris Versace. As always, we do want you to check out your alerts for Chris's latest takes on today's trading. Helene, thanks for being here. It's great to have you. Happy Friday.

HELENE MEISLER: Happy Friday. Thanks for having me.

JD DURKIN: So I know you had volatility on your mind in your recent column over up on Real Money. You wrote the VIX is essentially telling investors now is not the time to get comfortable. Helene, what leads you to that conclusion? And what would you want specifically someone watching this, a member, to know about how you're gauging VIX action?

HELENE MEISLER: OK. I have a few reasons. One is that in the month of April, the VIX has come down drastically from almost near 30 to under 20. That's a huge move considering that the S&P is flat on the month, or pretty close to it. Usually, you get the S&P rising while the VIX was falling that much. So I get the sense there's quite a bit of complacency. I've got some other sentiment indicators that agree with that as well.

And then finally, I use an indicator called The Daily Sentiment Indicator. And it is daily, so it's quite sensitive. But it had come down to 18 recently, in the last few days. Yesterday, it jumped up because the market was down.

But the DSI goes on a scale from 0 to 100. So when it goes under 20, you sort of have to be on alert. Obviously, under 10 is like, forget it. You must be in the red zone by then, and you have to be looking for a change. So when it goes under 20, I'm starting to look for an increase in volatility rather than less volatility.

JD DURKIN: Is the Daily Sentiment Indicator, Helene, something you would recommend members look into if it's something they might be a bit unfamiliar with?

HELENE MEISLER: They can look into it. It is a subscription-based service, and it is quite expensive. So if you want to know when it gets to an extreme, you can just read my columns.

JD DURKIN: Fair enough. I absolutely advocate for that. I wonder if there are any other technical indicators here, Helene, you're watching. The Street pundits remain pretty hyperfocused on the economy, the high interest rate environment, and fill in the blank here with things that are drawing our attention.

HELENE MEISLER: Well, I like to use breadth indicators. And one of the things I've noted and been writing about is that the number of stocks making new highs just continues to lag. In early February, we had over 200 stocks making new highs on the New York Stock Exchange and on NASDAQ. So together, there were 400.

Now we can't even get to 200 on either exchange. But the New York Stock Exchange is hovering under 70, and NASDAQ is hovering around 50 or 60. And so it tells you that basically stocks that were making new highs then are making lower highs now. And so that's a breadth indicator. It means it's not expanding.

And the second part of that is I use a breadth indicator that's quite smoothed out. And it is still rising, but it is starting to falter. If we get another down day or two in the next week, that breadth indicator is likely to roll over.

And, to me, when the breadth indicators are rising, we should be buying the market. We should be looking for opportunities. When the breadth indicators are rolling over, we should be waiting for opportunities.

JD DURKIN: Helene, what most stood out to you from this last week of trading?

HELENE MEISLER: There wasn't much to stand out. I mean, it was like watching paint dry most days until yesterday came along. But mostly, I'm watching technology because I feel like the semiconductor stocks are underperforming in a big way. And if you look at them relative to NASDAQ, they have come down quite a bit. And the semiconductors have been leaders. And if they're not doing well relative to NASDAQ, I think it's another reason to be on the alert here.

JD DURKIN: All right. Well, speaking of alert, let's wrap up here with a look at a few of the top AAP holdings that you're recently taking a look at. Let's kick off with Elevance. Someone tells me here that the 440 to 450 range stands out to you. People will know it's trading right around 454. Why does that particular range stand out to you for a name like Elevance, Helene? And members, we will note, again, the stock is trading at about 454, so just outside that range, at least for now.

HELENE MEISLER: So if you look at a one-year chart, that 440 area has held for-- I think it's four times. And so, obviously, it's support. The curious thing about that stock, though, is it comes down-- it tends to make a spike low and then tends to bounce off of that area. So I see no reason that I would expect the pattern to change.

It's perhaps because of my total overview on the market that it's a little more cautious. I wouldn't expect a V bottom. but I would expect that that 440 area should really hold. And if you're looking for a spot to buy it, it's probably not a bad spot because, obviously, if it starts to break 440, you know you're wrong. So you're not going to lose much if you have to get out and realize that you're wrong.

JD DURKIN: Helene, any thoughts on United Rentals this morning to share with members?

HELENE MEISLER: Yeah. It's come down a lot. And here's a stock that has really decent support, around 340. So, again, I would say if the stock comes down to that 340 area, that's probably a good spot to take a look at it again because your risk reward is good. You're buying it well off the highs. You're buying it near support, and it's starting to stabilize.

It would need to then get over-- I think it's 440 or-- I'm sorry, three-- let me remember-- 350 or 360 before you could say, OK, it's no longer in jeopardy. But down there around 340, I think it looks all right.

JD DURKIN: Helene, I wonder if you have any major takeaways as we look at gold, especially this last week, especially after breaching that $2,000 level.

HELENE MEISLER: I do. I think if I were holding gold, I'd be a seller up here. I'd be looking to take profits-- a couple of reasons there. One is I got a measured target up there around 190 or 1,900-- 190 on the GLD, 1900 and change on gold itself. And so usually when you get to a measured target, the chart will stall out for an extended period of time or, more often than not, turn south. So that's number one.

Number two is I think the dollar is trying to bottom here. And if the dollar is bottoming, gold is likely going to correct again. And lastly, I'll go back to that DSI. The DSI got to, I think it was 86 on gold about two weeks ago, again showing us that there was too much complacency in people who were low on gold. And by the way, I would say the same thing about silver, where the DSI got to 92 or 93.

JD DURKIN: All right. Fair enough. Helene, thanks for taking the time to join us. Happy Friday and have a great weekend. Great to have you.

HELENE MEISLER: Thanks. Have a great weekend.

JD DURKIN: Absolutely. OK, members, Chris Versace and I will be back on Monday morning to get you ready for another very busy week ahead. Have a great weekend. We'll see you then.